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Articles Published in: March 2012

March 30, 2012

FHA Loans and Credit Reports

By Joe Wallace

One frequently asked question about FHA home loans involves the credit check. Many borrowers want to know what credit score the lender is looking for, (many lenders require a minimum score of 620) but many more also want to know what kind of credit reporting data the loan officer needs to approve or deny an FHA home loan application. There are many areas the lender must review as part of the FHA loan application. A typical credit check includes a review of all credit inquiries over the last three months–one reason why many lending experts recommend not applying for new credit cards or other lines of credit before or during a home loan application. The lender must also review credit information from the last seven years of the applicant’s credit | more...

 

March 29, 2012

FHA/HUD Disaster Relief Announced for West Virginia

By Joe Wallace

A Department of Housing and Urban Development press release announces disaster relief for homeowners and FHA borrowers affected by recent storms, flooding, and landslides in West Virginia. According to press release HUDNo.12-062, “President Obama issued a disaster declaration for Lincoln, Logan, and Mingo Counties. The President

 

March 28, 2012

Getting Started With An FHA Home Loan

By Joe Wallace

Potential home buyers at the very start of their FHA home loan journey should take advantage of three free online resources that can help prepare the borrower. The first of these resources is the online mortgage calculator. These are offered by private agencies such as FHA.com, and by official government websites such as Ginnie Mae. The online mortgage calculator can help you plan and budget for an FHA home loan by showing you whether your current income is enough to qualify based on your monthly debts and other factors. Another important resource is the Department of Housing and Urban Development’s online Homebuyer’s Kit, which offers everything from a cost analysis of buying versus renting to learning about home buyer’s assistance programs in your state. This kit is fairly comprehensive and | more...

 

March 27, 2012

FHA Loan Reader Questions: FHA 203K Rehab Loans

By Joe Wallace

A reader asks, “When applying for an FHA loan, do I have to get pre-qualified before i get pre-approved or could I just get pre-approved? What does your credit score have to be in order to get a FHA 203k loan? Is it hard to get approved for a FHA 203k loan?” An FHA 203K loan is described at the FHA official site as a program “for the rehabilitation and repair of single family properties. As such, it is an important tool for community and neighborhood revitalization and for expanding homeownership opportunities. Since these are the primary goals of HUD, the Department believes that Section 203(k) is an important program and we intend to continue to strongly support the program and the lenders that participate in it.” FHA 203K loans | more...

 

March 23, 2012

Streamline Your FHA Mortgage

By Joe Wallace

According to the FHA official site, streamline refinancing for FHA home loans has been offered since the 1980s. While “streamline refinancing” refers to the amount of paperwork involved with processing the new home loan, it is not meant to imply there are no costs involved with the refinancing loan. FHA streamline refinancing loans for borrowers with existing FHA mortgages must result in either a lower interest rate, a lower monthly payment, or both. Exceptions are made when the borrower is refinancing into an FHA streamline mortgage from an Adjustable Rate Mortgage, also known as an ARM loan. Unlike FHA cash-out refinancing, no money is permitted to go to the borrower as part of the streamline loan. That means no “debt consolidation” or other purposes are permitted with FHA streamline loans–these | more...

 

March 22, 2012

HUD Announces Housing Counseling Grants To Help Families Avoid Foreclosure

By Joe Wallace

The Department of Housing and Urban Development (HUD) has announced $42 million in housing counseling grants to 468 national, regional and local organizations. These grants are intended to help families find housing and avoid foreclosure. According to the press release HUDno.12-055, “Housing counseling grants will assist families in becoming homeowners, many for the first time, and remaining homeowners after their purchase. They also provide assistance to renters and the homeless, and offer financial literacy training to individuals and families.” These grants are awarded to local and regional housing counseling agencies, which in turn offer counseling services to those looking to find or keep their homes. “The HUD-approved counseling agencies this funding supports are crucial in helping struggling families on a one-to-one basis to manage their money, navigate the homebuying process, | more...

 

March 21, 2012

FHA Loan Reader Question: Divorce and FHA Loan Eligibility

By Joe Wallace

A reader asks, “I am separated from my husband…and want to buy me a home. We do not have any children together and I do not want alimony, he can have the house we once shared. He has agreed. I am using a down payment from my 401k from my job. What do you know about these situations?” While this question is far too general to answer specifically, we can talk about some of the basic issues a borrower in this situation might face. The big question in this situation is whether the reader is obligated on the first home. FHA home loan applications are reviewed for three basic things–credit rating, debt-to-income ratio, and verifiable income. There are other issues, but for this reader question these are “the big three”. | more...

 

March 20, 2012

Reader Question: FHA Down Payment Requirements

By Joe Wallace

A reader asks, “I am in the process of buying a home and trying to get an FHA loan. The mortgage company said we could no longer use gift money for down payment that we had to have the money in our bank account for 60 days. We got a gift of $30,000 to put on our house. What are the rules for FHA?” The FHA has specific rules covering gift funds for down payments. According to the HUD Homeownership Center Reference Guide, Chapter Two, Mortgage Credit Guidelines, the rules are clear: “HUD does not approve down payment assistance programs in the form of gifts administered by charitable organizations. (HUD defines charitable organization as “an organization who has