real estate finance - full book (500 pgs)

Refinancing no refinancing are available with a

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Unformatted text preview: g fees. These fees range from 1.25% to 3% if the down payment is 2% (with a maximum of $240,000 total), and from 1.25% to 2% if the down payment is 3% (over $240,000 up to $250,000). These one–time loan guarantee fees enter the picture when the down payments are less than 20%, and can be paid by seller or buyer. On loans up to a maximum not exceeding $240,000, the fee can be financed. If the loan amount exceeds $240,000, the fee must be paid up front in cash. Prepayment Penalty – Now the same as on other owner–occupied homes: 6 months' interest 9n the amount prepaid in excess of 20% of the original loan amount, if pre p aid during the first 5 years. Impound – Required for taxes and insurance. Included in monthly mortgage payments are principal, interest, property taxes, and fire, disability, and life insurance premiums. 5-46 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 5: GOVERNMENT PARTICIPATION & BACKED LOANS Term of Loan Repayment – Usually 30 years but can later extend for up to 40 years under extenuating circumstance. Interest Rate – The interest rate is variable. The rate is checked periodically to determine if a change is necessary (it has never exceeded 8%). When the interest rate changes, either the monthly payment or the amortization period may be changed. The cost of the bonds and running the program determine the interest rate. Start rates may vary with market considerations. In 2002, revenue bond programs were 6% with a cap of .5% over the start rate; general obligation bond programs were at 7.25% (for mobile homes, add 1 percent); and unrestricted funds were at 6.5%. The department also has a lower interest rate for the qualified mortgage bond program, using revenue bonds only, for “first time home buyers” and for “targeted area purchasers.” There are purchase price limitations and income limits for target and non–target areas. These are set according...
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