In 2002, when I first heard the phrase “high-cost loan”, it was a very serious thing. It was illegal to put a Homeowner in to a loan when the loan fees exceeded a pre-determined amount. No loan will be more costly than an FHA loan starting June 1st. You will have to pay a 1.75% up-front fee along with monthly mortgage insurance premiums at their highest levels EVER. The worst part is, the mortgage insurance will never go away. It used to go away once the homeowner reached a 78% loan amount with respect to the home’s value – assuming the loan was at least 5 years old. Now, the monthly premium will never go away. This makes FHA loans look worse than the 80/20, no-money-down, sub-prime loans that created the global financial crisis in the first place!
It’s all over for the FHA loan. It makes absolutely no sense at all past June 1st. It was nice knowin’ ya.
Other topics covered today:
– When you should and shouldn’t refinance
– Tricks the Banks are using to try and steal people’s homes via Foreclosure
– How to make the most of a no-cost refinance
– What affect with this all have on San Diego’s Real Estate Market
Today’s In-Studio Guest:
Jon Jerotz, VP of Mortgage Lending with Guaranteed Rate & San Diego Mortgage Expert