Articles Published in: January 2011

January 12, 2011

FHA Refinancing: Basic Rules for Cash-Out Loans

FHA refinancing loans are excellent options for those who want to lower their interest rates, monthly payments or take advantage of the equity built up in the property. There are two basic kinds of FHA refinancing options for qualified borrowers. The FHA defines the two in the simplest terms as "cash out" and "no cash out". For cash-out refinancing there are two "tiers" a borrower can consider. One is for a refinancing loan limited to 95% of the value of the home as appraised.

January 11, 2011

FHA Loans for Fixer-Uppers: The 203(k)

By Joe Wallace

Those shopping for a home with an FHA loan aren't always interested in buying a brand-new property. Some borrowers want to purchase fixer-upper homes at a lower price to save money and invest labor into a home to make it exactly the way they want it. The FHA 203(k) loan program offers qualified FHA borrowers a chance to borrow money to accomplish this. Qualified borrowers must meet a downpayment requirement, which is roughly 3.5% of the purchase price AND repair costs of the property.

January 10, 2011

FHA Warns About Mortgage Insurance Refund Scams

By Joe Wallace

As discussed in our last blog post, some FHA borrowers are eligible for refunds on their mortgage insurance premiums under the right circumstances. A small service industry has sprung up where third-party companies contact FHA mortgage holders, offering to locate these refunds for a fee. The FHA has hired a company called Immediate System Resources to locate FHA loan holders the government owes money to, but there is no fee. In fact, FHA borrowers never have to pay to get information about or payment from the FHA connected to mortgage insurance premium refunds.

January 10, 2011

What is an FHA Tracer?

By Joe Wallace

There are two possible definitions of the term, "FHA Tracer". The most common one is a third-party company that contacts home owners with an offer to help track down a possible refund from the FHA for mortgage insurance premiums. These companies charge finder's fees and ask for payment in exchange for their services. The other definition of the phrase FHA tracer is connected to the FHA itself. While the FHA doesn't use the term "tracer" in connection with its activities, there is an ongoing effort to identity homeowners the FHA owes a refund to.

January 7, 2011

New FHA Guidance For HECM Loan Borrowers, Lenders

By Joe Wallace

FHA Reverse Mortgage Loans, also known as Home Equity Conversion Mortgages or HECM, provide a way for seniors age 62 and older to borrow against the equity in their homes. Under HECM loan rules, the borrower does not make monthly mortgage payments--the home is paid off when it is sold or when the borrower dies. But that lack of monthly mortgage payments may lead some borrowers to assume there are no payments due on the home whatsoever. This is not true--property taxes are still due, as are hazard insurance premiums or other commitments.

January 6, 2011

What Does The FHA Require For Reverse Mortgages?

By Joe Wallace

FHA reverse mortgages, also known as a Home Equity Conversion Mortgage, are a way for qualified borrowers to take out a home loan against the equity built up in them without having to worry about monthly mortgage payments. The FHA reverse mortgage program requirements are set up for a specific group of eligible borrowers. Do you know if you qualify? Here are the basic facts about FHA-insured Reverse Mortgages or HECM loans:

January 5, 2011

Facts About FHA Home Loans for First Time Home Buyers

By Joe Wallace

First time home buyers sometimes have a difficult journey ahead of them because of all the new terms, rules, requirements and other issues the must navigate for the first time. Fortunately there are some basic concepts that can be presented simply to help newcomers to the housing market learn what they need to do in order to get an FHA mortgage.

January 4, 2011

What is the Making Home Affordable Short Sale Program?

By Joe Wallace

When borrowers get into trouble on their FHA mortgages, the FHA encourages them to act quickly in order to save their homes. But some borrowers don't act fast enough and fail to qualify for some government home loan modification or refinancing programs. Other borrowers aren't qualified for certain programs even when they do act. In cases where a borrower has tried loan refinancing, modification or other home owner bailout programs there may be an alternative to foreclosure in the form of something known as the short sale.

January 4, 2011

Are My Tax Returns Required for an FHA Loan?

By Joe Wallace

When applying for an FHA home loan, borrowers will find a list of documents needed so the lender can process the FHA home loan application. These documents are the minimum needed to establish an accurate picture of a borrower's credit and payment history; the lender asks for a range of information--everything from bank account numbers to a list of residences and employers from the last two years. But the lender also has to meet FHA requirements, and in some cases that means getting official copies of tax returns and other information.

January 3, 2011

Are My FHA Mortgage Insurance Premiums Tax Deductible?

By Joe Wallace

FHA home loans have advantages over conventional mortgage loans; for some buyers those advantages include tax breaks in some areas as allowed by current federal tax laws. Like so many other aspects of buying a home, there's no standard tax deduction guidance for all borrowers--much depends on current law, the type of loan, and sometimes even the income of the borrower. What follows is not tax advice, but merely a reminder that FHA mortgage holders should ask their tax preparers (or hire one) about FHA mortgage insurance deductions on their taxes.