January 19, 2015
Happy Martin Luther King Day! We pause from our usual posts about FHA home loans, and answering questions about FHA mortgage loans in order to observe this very important holiday. Our regularly scheduled posts will resume tomorrow. In the meantime we stop to reflect on the work and accomplishments made by Doctor King. Happy MLK Day!
January 17, 2015
Mortgage loan rates this week were described by some sources at “near 20-month lows”. This week mortgage loan rates, best execution, benefitted from some volatility that can and often does bring a correction to push the rates back into more realistic territory. 30-year fixed rate conventional mortgage loan best execution rates approached 3.5% for some extremely well qualified borrowers applying with lenders offering that possibility. However, on Friday a slight correction did come, bringing the best execution rate back up into 3.625% territory. That rate is a best execution rate and is not available to all borrowers or from all lenders. Your FICO scores and loan repayment history will affect your ability to access that rate. Even so, borrowers who were offered higher rates than the best execution numbers still | more...
January 16, 2015
A reader asks, “Husband and wife are seperated for the moment. No plans to divorce for a while. Husband wants to purchase a home in Georgia. The wife will also purchase at some time in the future. Do they have to be divorced before the husband can purchase a home?” There are too many missing details to give even a general answer on this one–do the married couple currently own a home and have a mortgage? If so, who is taking ownership of the property and financial responsibility for the loan? Those are important factors in any home loan application–the amount of current debt, the amount of current income, and how much of that income is taken up by the current debt. A borrower with too much debt and not | more...
January 16, 2015
A reader asks, “I wanted to know if I can qualify for any of FHA products for first time homebuyers:-My wife owns a home in her name only.-I am not listed anywhere on the deed, title, loan, etc-We currently live in her 2-bedroom home, but have outgrown it. We now have 2 kids and my mother is living with us.We would like to move to buy a new home, in my name only. I have never owned a home, however, my wife and I have been filing jointly for all of our tax returns (her property is listed on all of our tax returns). My wife plans to keep her current home as an investment property. So, do I qualify for a FHA loan, or any of your listed down payment assistance programs?” | more...
January 15, 2015
A reader asks, “When calculating the annual PMI, are the bps assessed against the original loan amount or the current pay-off amount of the loan?” Assuming the reader is asking about annual FHA Mortgage Insurance Premiums, and not monthly Private Mortgage Insurance, it’s important to know the following: When the FHA and HUD announced a reduced annual Mortgage Insurance Premium, it created a table showing how the new Mortgage Insurance Premium (MIP) is calculated. FHA MIP is calculated, according to the FHA/HUD official site, by “amortization term, base loan amount and Loan to Value (LTV) ratio.” Here is the table published by the FHA showing the new FHA MIP rates: As you can see, there is a listing for the previous FHA MIP payment and the new FHA MIP payment. | more...
January 15, 2015
A reader asks, “We recently went through CH7 BK. We have high 500′s for both of our scores and have no debt besides one student loan at $90.00 a month and two credit cards with $0 balance and no payments due. What would our chances be of obtaining an FHA for first time home buyers. We have $5000 to put down and have a city program that will also help with more $ for closing/down payment. We want to buy in September/October. which would be 10 months after our BK discharge.” There are a variety of issues at work in this reader question that should be addressed. Regardless of the bankruptcy issue, borrowers in general will find lenders requiring FICO scores upward of 620 for FHA home loans. It’s true | more...
January 14, 2015
Mortgage loan rates have in general hit some amazing lows in the earliest days of 2015. At the time of this writing mortgage loan rates dipped to lows some sources report not available since May 2013. For some extremely well-qualified borrowers, mortgage loan best-execution rates have actually dipped to at or near 3.5% for 30-year fixed rate conventional mortgage loans. That’s a rate not available to all borrowers or from all lenders–access to best execution rates depends on the applicant’s FICO scores and other financial qualification. But suffice it to say that home loan rates are looking very competitive in 2015 thus far. Many borrowers who can’t access the 3.5% best execution rate may be able to get quoted 3.625% (again, based on extremely well-qualified borrowers with excellent FICO scores | more...
January 14, 2015
A reader asks, “My husband went bankrupt and it was discharged on may 7,2013 since then we have been bringing his credit up to 620 and my score is around 770 my question is on what month or day can we apply for a FHA loan and is our score good enough?” Unfortunately the answers to these questions depend greatly on a number of factors including lender standards. The waiting period following a bankruptcy–how long the borrower must wait before being allowed to apply for a new mortgage–depends on the type of bankruptcy and lender standards. FHA loan rules do provide a minimum waiting time depending on the type of bankruptcy, but these wait times are also dependent on circumstances. For example, here are the FHA loan rules for Chapter | more...
January 14, 2015
A reader asks, “I just got an FHA loan last May. Do I qualify for a reduction when it happens?” This question comes in reference to our previous blog post discussing the FHA announcement that annual FHA mortgage insurance premiums would be reduced in 2015, amounting to a savings as much as approximately $900 per year (according to a speech by President Barack Obama). Our post, “FHA Announces Mortgage Premium Cut” included the following details on the new FHA policy: “An FHA/HUD press release (HUDNo. 15-001) announced the change, which could take effect as early as the end of the month. According to the release, ‘As the nation’s housing market continues to improve, U.S. Housing and Urban Development Secretary Julián Castro today announced the Federal Housing Administration (FHA) will reduce | more...
January 13, 2015
A reader asks, “I have a credit score of about 590, have some old stuff on my credit, which has been cleared up but still showing. Im looking for a $100,000 loan and have $8k to put down. I just last week got financed for a newer car, what are the chances I qualify for the FHA program since I am a first time home buyer?” FHA minimum FICO score requirements for maximum financing aren’t necessarily the same as the lender’s minimums–the lender is free to require a FICO score higher than the FHA minimum of 580 for maximum financing on a new purchase FHA mortgage loan. The credit report issue is also something the lender would have to address on a case-by-case basis. Depending on circumstances and the presence | more...