Articles Published in: 2014

What you should know about FHA 203(h) Loans For Disaster Victims

September 5, 2014

FHA Mortgage Rate Trends For The Week of September 2, 2014

FHA mortgage rates can move higher or lower in any give day or week for many reasons. Those reasons can include overseas headlines (financial or political in many cases) that affect investor behavior in the USA. That was one of the factors this week when it came to rising FHA rates–there was market volatility based on the Russia/Ukraine situation, and we also saw domestic economic data that some market watchers predicted would end up competing with Russia/Ukraine developments as an influence on mortgage rates. Monday was a day off for the markets, so when the three day holiday weekend ended, Tuesday’s rate activity included upward movement in small increments that didn’t change average “best execution” rates for FHA home loans. If you were investigating rates this week, it’s true you | more...

September 5, 2014

Property Taxes and Reverse Mortgages: A Reader Question

By Joe Wallace

A reader got in touch with us recently with a lengthy question about reverse mortgages. We won’t reprint the entire message, but here are the relevant parts: “The Reverse Mortgage Company….(Lender name deleted) changed to (Lender name deleted) told us in Feb 2014 they would pay our property taxes for 2013 because we were struggling. As of today and 35 calls later they still have not paid them.Today for the first time I heard the words ‘redemption period’ She assured me we would be notified AGAIN as soon as they are paid and we can make arrangements to pay it back.” “We are close to the end of the year and id not paid by Dec. we are in trouble with our local tax bureau. I don’t understand what is | more...

September 4, 2014

FHA Loan Rules: Verification Of Employment

By Joe Wallace

When you apply for an FHA mortgage, your lender will need a variety of documentation from you about your income, assets, debts and employment. In fact, employment verification is one of the major steps in the FHA loan approval process. But how does your lender verify you are working with a current employer? According to the rules printed in HUD 4155.1, the lender will require a current pay statement and a written Verification of Employment (VOE). Not all FHA loan applicants may be able to furnish a written VOE, so the FHA loan rule book lists some acceptable alternatives. Chapter One, Section B states: “As an alternative to obtaining a written VOE, the lender may obtain the borrower’s • original pay stub(s) covering the most recent 30-day period, and • | more...

September 2, 2014

FHA Loans: Appraisals Versus Inspections

By Joe Wallace

A reader got in touch recently with the following: “I recently purchased a home with foundation issues. It was not required of me to get a home inspection buy the realtor. However it was required of me to get an appraisal by the realtor.” “It is unfortunate for me that I could not be there during the time of the appraisal, the real estate agent was there . It is also unfortunate for me that I did not survey the garage where the damages exist. Is it proper for a licensed real estate agent to sell property without disclosing foundation issues? I also got an FHA Loan to purchase this property.” It is true that FHA appraisals are required, and home inspections are not. However, no borrower should purchase a | more...

September 1, 2014

Happy Labor Day!

By Joe Wallace

Happy Labor Day! Banks and the markets that affect FHA mortgage rates are closed today. We pause from our usual posts about FHA home loans and answering reader questions to enjoy the holiday. Our regular post schedule resumes tomorrow, Tuesday September 2, 2014. Thanks for reading!

August 29, 2014

FHA Maximum Loan Amounts: Some Basics

By Joe Wallace

FHA loan applicants often want to know how much they can borrow with an FHA mortgage. There’s no set answer to that question since the FHA loan amount depends on the appraised value of the home and other factors. Borrowers will need the amount of the sale price of a home before a loan amount can be properly calculated. Some borrowers want to know if they can apply for more than the sale price of the home with the intent of taking the excess funds for other purposes. This is not permitted for FHA home loans, so borrower who ask “how much can I borrow?” with that idea in mind should know it’s not a possibility. But the FHA loan basics for maximum loan amounts are spelled out for the | more...

August 28, 2014

FHA Mortgage Rate News For Thursday August 28 2014

By Joe Wallace

FHA mortgage loan rates have been lower this week in small increments, and while many borrowers could see the difference in rates reflected in their closing costs rather than the actual rate number itself, the move lower does benefit the borrower. Mortgage loan rates in general have approached their lowest levels of the year (best execution), and we’ve seen movement both upward and downward this summer only in a narrow range. The causes of this summer’s rate changes are varied, including breaking financial news from Europe. Add to that investor reaction to the Ukraine crisis, plus the situation in Gaza. At home, bond auctions, economic data releases such as the GDP and Employment Situation Report and other financial information have also influenced rates within the narrow range we’ve seen all | more...

August 28, 2014

FHA Loan Questions: Loan Changes

By Joe Wallace

A lengthy reader question came in recently, which we have edited for space and brevity’s sake. The reader asks, “I am a first time homebuyer & the originator of my FHA loan was (lender name deleted). In qualifying, it was clear my max affordable payment, including principle & interest, escrow, MIP, & interest was $1500 per month.” “During the underwriting process I kept in touch with the broker to ensure no substantial increase in my monthly payment. On the day of closing my payment came in over $400 higher than originally quoted due to an increase in escrow estimation. My broker acted like he was surprised, then told me he later his primary concern was getting my loan closed within 90 days to prevent a new credit report being pulled | more...

August 27, 2014

FHA Eliminates Post-Payment Interest Charges

By Joe Wallace

The FHA has announced the elimination of certain interest payments previously owed beyond the date the FHA mortgage was paid in full. According to the press release HUDNo.14-104, titled, “FHA To Eliminate “Post Payment” Interest Charges, “borrowers who prepay their FHA-insured mortgages will not have to make interest payments beyond the date their mortgage is paid in full.” A new FHA rule known as “Handling Prepayments: Eliminating Post-Payment Interest Charges”, will apply for FHA mortgages closed on or after January 21, 2015. According to the press release, the new rule, “explicitly prohibits lenders from charging borrowers post settlement interest, which is broadly defined as a ‘prepayment penalty’ by the Consumer Financial Protection Bureau (CFPB), for all FHA Single Family mortgage products and programs.” This is an important development for borrowers | more...

August 26, 2014

FHA Streamline Refinance Loan Rules: A Reader Question

By Joe Wallace

A reader asks, “I currently have an FHA loan that I have had for 5 years and would like to streamline,but the maximum loan amount has changed since I got the loan and the new limit is less than what I owe. Does the new limit apply to streamline loans as well as new loans?” The FHA and HUD issued some guidance back in 2013 to clarify the rules for maximum loan amounts for FHA Streamline Refinancing. According to Mortgagee Letter 2013-29, the following clarification affects how the maximum amount is calculated, and what can be included in the loan amount when calculating that maximum. “Mortgagees are reminded that when processing an FHA-insured streamline refinance mortgage, the new maximum mortgage amount must always be calculated starting with the outstanding principal balance on | more...