Luke Landis Senior Mortgage Banker 515-222-0123 office 515-491-9161 mobile 888-931-9993 fax View My Profile   email me!

Major FHA Changes Coming on September 7th

FHA (Federal Housing Administration) insured loans are headed for a big change. For those unfamiliar with FHA mortgages, these loans are insured by the government, which allows for flexible approval guidelines. This insurance is paid for by the borrower as an upfront premium collected at close and as a smaller premium collected on a monthly basis. These premiums are then pooled with those from other FHA borrowers to form an insurance fund.

In times of normal demand, the aforementioned process works pretty well, but with the demise of sub-prime mortgage options and collapse of the housing market, FHA loans have steadily grown in popularity. The increased demand has put significant pressure on the capital reserves of the insurance fund. As a result, Congress approved a plan this week to shore up the agency’s insurance fund with a reconfiguration of the mortgage insurance paid by borrowers on loans originated after September 7th.

Under the new structure, FHA requires a borrower to pay an Upfront Mortgage Insurance Premium calculated at 1% of the loan amount. The good news is that this is down from the 2.25% currently required. The bad news, however, is that the monthly figure will increase from a factor of 0.55% annually to a factor of 0.90% annually.

What does this mean for the consumer?

Let’s look at an example: assume a $150,000 home purchase:

BEFORE September 7, 2010

ON OR AFTER September 7, 2010

• Upfront Premium (1.00%): $1,447.50
• Monthly payment including mortgage insurance: $826.93

NET CHANGES

• Upfront cost: Decreased by $1,809.38
• Monthly cost: Increased by $33.00
  
   

As a Des Moines Mortgage lender, I am truly passionate about my profession, and the result is that nearly 100% of my business is by referral from satisfied clients, trusted financial advisors and the most experienced realtors in Des Moines, and throughout Iowa. My mission is to carefully guide you through the entire home loan process, so that you feel confident as you make choices about the many options available for your financing strategy. With many years and a wide range of experience in the mortgage industry, my dedicated team stands ready to assist each and every step of the way.

I understand that it's not just a house, it's your home.

Your home is one of the largest financial commitments that you will make during your life, and many people view that as meaning just another monthly payment.

I can help you realize that your home is truly a valuable financial tool, and will help you achieve the dreams and plans they envision for your future.

You only think about home financing a few times during your life ~ I think about it every single day. It's your home and your future. It's my profession and my passion. I'm ready to work for your best interest.

About Me

Luke first started in the mortgage industry 12 years ago. After several years in a bank environment, Luke determined that his real passion was helping people buy and refinance homes so he decided to work exclusively in real estate finance. As a Senior Mortgage Banker for Heartland Mortgage Group, Luke believes that quality customer service is the key to achieving a great loan experience. Outside of the mortgage industry, Luke has been married to his wife Emily for 12 years and has a five year old daughter named Allison and a two year old son, Owen. Luke is involved with his church Point of Grace and  his passions are music , singing, the Iowa Hawkeyes and the Chicago Cubs. You can also find Luke on his company website: www.hmg1.com and you can hear him weekly on Saturdays at noon on Moving Iowa on 98.3 WOW FM, and Thursdays at 7pm and Sundays at 4pm on Praise 940 AM