FHA Commissioner David Stevens has announced the changes in Mortgage Insurance Premiums will go into effect on September 7, 2010.  However, FHA will make the premium fee changes on all new case numbers effective October 4, 2010.  The reduction of the up-front premuim appears to lessen the effects from the increase in the annual premiums but it doesn't mean that they're offsetting.

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Every person involved in sales has read an article or attended a seminar about a particular prospecting technique and thinks "I used to do that."  In some cases, they may have been successful with the strategy and then, for whatever reason, they quit doing it.  Therein lays the great mystery of sales.

My close freind and national sales trainer Dave Beson says "Everything works; nothing doesn't."  There are lots of things that will work but they must be done and for a long enough period of time to give them a chance to return the results.

I've seen Dave take a large piece of paper off an easel pad on stage and start describing different prospecting techniques.  He'd pretend to be an agent talking about what won't work.  I won't call for sale by owners; there's too much competition from the other agents.  At that point, he'd tear a piece of paper off and let it fall to the floor.

He'd mention another type of prospecting such as expired listings and state why he wasn't going to work that either and tear another piece of paper from the larger piece.  He'd literally go through most of the common types of prospecting such as open houses, floor duty, farming, direct mail, cold calling and others while each time tearing one more piece of paper from what was originally a large piece of paper.

Finally, Dave would have one small piece in his hand and ask the audience "if you've eliminated all of these different things, what's left for you to do?"

My personal belief is that you don't have the right to say something won't work until you've given it a fair chance.  More importantly, when you're faced with reduced income and the challenge to increase it, why don't you examine the things you've done in the past where you've had success.  Just because you're not doing them now, for whatever reason you stopped doing them, doesn't mean they won't work again.  In fact, I'm almost quite sure they will.

Recently, I bought ten ears of corn for one dollar; one of the summer bargains.  Everyone understands that you pay less when certain produce is in season and more when it isn't  Supply and demand dictates the price and the availability.

If you don't see artichokes in the market for a while, it certainly doesn't mean they're not growing artichokes anymore; it just means they're not currently in season.  When the banking crisis occurred, certain types of mortgages were pulled off the shelves.  Now that the market is starting to even out, some are starting to reappear and 80/10/10 mortgages are among them.

The advantage of an 80/10/10 mortgage is to avoid the expense of mortgage insurance for buyers wanting a 90% loan.  A buyer can obtain an 80% first mortgage and a 10% second mortgage with a 10% down payment.

The reason they were temporarily not available was the lack of investors who were willing to loan the second mortgage.  The decline in property values in the past few years have wiped out the equity of many homeowners and even the security of the 2nd lien holder.  However, now that values have stabilized in most markets and are even on the rise in some, investors are willing to consider the 80/10/10 again.

In the example, you can see that the 80/10/10 can save a buyer $93.46 per month which can be a considerable amount of money over the life of the mortgage.  The interest rate on the second loan will be higher than the first because there is more risk to the investor.

There are different ways to pay for mortgage insurance but a common method is a monthly factor which is added to the interest.  The rate below contain both the interest rate on the mortgage and the monthly mortgage insurance.

Helping buyers make better decisions is a valuable service real estate professionals can provide.  Having the right tools and information can make the decisions easier to understand.