Articles Published in: February 2015

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

February 10, 2015

FHA Loan Questions: Minimum Income Requirements

A reader asks, “Hello just want to know how much do my annual gross amount have to be to get approved for a FHA loan?” Two of the most common myths about FHA home loans are that the FHA is only for first-time homebuyers and that FHA loans have a minimum income or maximum income requirement. None of those things are true. The FHA does not have a minimum dollar amount the borrower must earn in order to qualify, and there is no income ceiling or limit for FHA loans. FHA loans are not specifically for disadvantaged people, nor are they specifically for first time home buyers. However, it’s important for all potential FHA borrowers to know that your lender will determine whether or not you can afford the new | more...

February 10, 2015

FHA Loan Reader Questions: FHA Loans After A Short Sale

By Joe Wallace

A reader asks, “We had a job loss and were working on a loan modification that was supposedly going to be approved and was then denied. We filed and were discharged from CH 7 back in 2010, never reaffirmed the mortgage, but paid on it until it was obvious we were not going to get any cooperation from the lender. Moved out and short sold in May 2013 and are now looking to buy again.” “What is the FHA standard for the downpayment we’d have to make? We have been told 20%, but read elsewhere that for a mortgage that was discharged in bankruptcy and never reaffirmed, that the applicable period for any wait time is the date of the bankruptcy discharge and not the date of the short sale? | more...

February 9, 2015

FHA Loans and Wage Garnishment: A Reader Question

By Joe Wallace

A reader asks, “if I have state taxes being taken out of my check as a garnishment will that disqualify me for FHA loan?” FHA loan rules found in HUD 4155.1 Chapter Four address delinquent federal taxes in association with an FHA loan, but not state taxes specifically. However, we can get an idea of the FHA’s position on this issue by reading what it has to say about a borrower who may be delinquent on federal taxes: From Chapter Four of HUD 4155.1: “If, after checking public records, credit information or CAIVRS, a borrower is found to be presently delinquent on any Federal debt or has had a lien (including taxes) placed against his/her property for a debt owed to the Federal government, he/she is not eligible for an | more...

February 9, 2015

FHA HECM Loans and Appraisals: A Reader Question

By Joe Wallace

A reader asks, “I am in the process of getting a reverse mortgage loan based on the approximate value of my home. If the Appraised value is considerably less than initially expected and/or extensive repairs are required to comply, do I have the option to back out of the loan process?” Without more information, this question is difficult to answer. How far along is the HECM loan process? Has the reader signed any legally binding paperwork that commits him or her to closing the deal? These are important questions to ask and borrowers in these cases should approach the lender directly for assistance. If the borrower feels that he or she has not signed a contract or other legally binding document that commits the HECM loan to close, yet feels | more...

February 7, 2015

FHA Loans and Identity Theft Issues: A Reader Question

By Joe Wallace

A reader asks, “We have applied for a FHA loan and until yesterday, had no idea that that someone had filed a tax return under my social security number back in 2012. I have submitted the proper forms to the IRS, and they have my accurate 2012 tax return on file. Because I submitted the tax return late, I have never been contacted by the IRS regarding this.” “It was not until I called to set up a payment program for the taxes that I owe, that it was brought to my attention. Is this a 100% deal breaker for the loan, if my account is under review for identity theft? Can the underwriters still get the tax information that they need or is all my information frozen? I am | more...

February 6, 2015

FHA Loan Reader Questions: Seasoning Period Following Foreclosure

By Joe Wallace

A reader contacted us with a lengthy question about FHA home loans following a foreclosure. Here’s the question: “Are there any new rules as it relates to months required with a foreclosure expected in 2015? I had the same situation in which in my bankruptcy was my current house we had purchased after going through a divorce and loosing my employment. On my credit report it clearly shows that the loan to that property was part of the bankruptcy and was discharged Sept 13,2010. I am trying to refinance with my current husband under an FHA Loan and I have gone to multiple lenders and once all is reviewed they come back with the same response that since my deed to the property we included in the bankruptcy did not | more...

February 6, 2015

FHA Loan Forbearance: A Reader Question

By Joe Wallace

A reader asks, “Got fha loan for our home on Dec 2011. We have been doing fine until early 2014, we got a little behind. We have never let any payment be more than 30 days late, but we had some late payments to our bank on this loan. My wife is out of work after this month. Do we have any forbearance options?” In situations like these it’s extremely important to being talking with the lender right away. FHA loans do have forbearance options for qualified borrowers, but many of a borrower’s options are most plentiful before the mortgage becomes delinquent. Working with your lender at the first sign of trouble with the mortgage loan is a very important move towards foreclosure avoidance. According to the FHA official site: | more...

February 5, 2015

FHA Loan Case Numbers: A Reader Question

By Joe Wallace

A reader asks, “How can I as a consumer find out if my FHA case number has been issued without asking lender? It does not do me any good to call lender I talk to a different person everyday. I keep getting told it has not been issued.” “I put in application on January 6th, 2015. I know they probable had to cancel my old case # because I had an appraisal done on the 12th. This is a refinance and I have been in this house for over 10 years. How long is it taking FHA to issue the new case numbers? I realize they are delays since the reduction went into place but it has been 6 days. Is there a number I can call to see if | more...

February 5, 2015

FHA Loan Rules For New Loans Following Chapter 7

By Joe Wallace

A reader asks, “In june 2015, i will have two years post bankruptcy, chapter 7. I want to purchase a home, first time buyer, credit score of 710, my question is, Am I able to start the process now, or should i wait the two full year mark? ( I was told this by a mortgage rep that fha requires two full years post bk) .” The FHA official site has a FAQ page about FHA loans after a Chapter 7 bankruptcy proceeding. It says: “A Chapter 7 bankruptcy (liquidation) does not disqualify a borrower from obtaining an FHA mortgage if at least two years have elapsed since the date of the discharge of the bankruptcy.” The reader’s comment about the two year waiting period is correct, based on the | more...

February 4, 2015

FHA Mortgage Rate Trends

By Joe Wallace

FHA mortgage loan interest rates have been holding at best execution levels of 3.25% for quite some time, and that’s despite ups and downs for 30-year fixed rate conventional mortgages. Late last week we saw rates for 30-year fixed rate conventional mortgages head, best executionwise, close to 3.5% for the most qualified borrowers. Overseas financial developments have helped keep rates as low as they’ve been–it’s a good idea to pay attention to the situation in Greece and news of the European Central Bank. These are factors that can affect rates in the short term depending on investor reaction to breaking news. On Monday of this week, those rates held steady more or less in spite of some lenders repricing higher, and on Tuesday it looked like the reversal of a | more...