Articles Published in: September 2015

September 18, 2015

Mortgage Rate Trends: Lower After Fed Announcement

The much anticipated Fed announcement came and went, and when rates were not raised, mortgage loan interest rates made a good recovery from the previous sideways-to-upward movement they were making. While Fed policy discussed yesterday does not directly dictate the rates offered by mortgage lenders, there is a definite influence there, and investor reaction to Fed policy also plays a role in pressuring rates higher or lower. So yesterday’s “no rate hike for now” announcement came as a welcome move, and by the end of the day we saw best execution rates for 30-year fixed rate conventional mortgages back in a range between 3.875% and 4.0%. That puts those numbers back in territory we haven’t seen since last week, but as many sources report, we’re still watching mortgage loan rates | more...

September 17, 2015

FHA Loan Credit Requirements Versus Lender Credit Requirements

By Joe Wallace

We get many questions about the difference between FHA loan minimum FICO score and credit requirements and the lender requirements for same. Here’s one of the latest examples: “Seems like there is a lot of contradiction between what is on the FHA site and what the FHA Reps. are answering the consumers the questions. Why have FHA guidelines if the lenders dont have to follow them and can overrule them with their own? I have a credit score of 580 and a one time 30 day late mortgage payment in the past 12 months…” There were other details in the reader question, but the information above was the most pertinent. And the answer to the first part of the question is fairly simple. FHA loan FICO score requirements and other | more...

September 17, 2015

Mortgage Loan Interest Rate Trends: Holding Steady Ahead Of Big Fed Announcement

By Joe Wallace

Thursday is a very important day for mortgage rates, thanks to the much anticipated Fed announcement later today that could bring news of an interest rate hike…or not. That announcement, at the time of this writing, has not happened so we await the news from the Fed and will write a post about the announcement and its effect on the mortgage loan interest rate environment–look for that update on Friday morning. On Wednesday mortgage loan rates held steady, which was not the case on Tuesday as nervous investors made choices in the markets that directly affect mortgage loan rates that sent those rates higher. But for now, at the time of this writing, 30-year fixed rate conventional mortgage loan interest rates held steady (best execution) at or near 4.0%. FHA | more...

September 16, 2015

FHA Rehab Loans: The Rules For 203(k)

By Joe Wallace

In a recent blog post we discussed the basics of the FHA 203(k) Rehab loan. This is a type of FHA loan that allows borrowers to repair a property being purchased with an FHA mortgage or to repair an existing home that was purchased previously. According to the FHA official site, the home to be rehabbed with an FHA 203(k) must be at least one year old. “A portion of the loan proceeds is used to pay the seller, or, if a refinance, to pay off the existing mortgage, and the remaining funds are placed in an escrow account and released as rehabilitation is completed. The cost of the rehabilitation must be at least $5,000, but the total value of the property must still fall within the FHA mortgage limit | more...

September 16, 2015

Mortgage Rate Trends: Moving Higher Ahead Of Fed

By Joe Wallace

You may notice us posting more this week about FHA loan interest rate trends; that’s because this is a major week for mortgage loan rates since the Fed announcement due Thursday on a possible interest rate hike is a major news item. Yesterday we reported that it is very likely that rates might go into a holding pattern ahead of the Fed, but as anxiety builds, investor behavior is putting upward pressure on the markets that directly affect mortgage rates. On Tuesday rates moved higher, pushing many lenders aggressively offering sub-four percent rates on 30-year fixed rate conventional mortgages (best execution) back into the 4.0% zone. Some borrowers may have noticed the difference in closing costs rather than an actual rate move depending on the lender. FHA mortgage loan rates | more...

September 16, 2015

FHA Loan Questions: Can Only One Spouse Be Obligated On The FHA Loan?

By Joe Wallace

We get lots of questions about FHA loans where spouses may or may not wish to apply for the loan together. Here’s one such recent question where the couple only wants to have one spouse apply for the mortgage: “Can my wife be the only person on the mortgage? If so do you only use her income to qualify or can you use both incomes. I have a judgment on my credit, but I have more income then she does and that would give us more of a mortgage to work with.” Unfortunately the answer to this question depends greatly on whether or not the couple reside in a state where community property laws apply. Community property laws, which vary from state to state where applicable, have a great deal | more...

September 15, 2015

Mortgage Rate Trends: Holding Pattern Until The Fed Announcement?

By Joe Wallace

Monday kicked off a wait-and-see week with rates holding steady ahead of Thursday’s Federal Open Market Committee’s announcement with regard to a possible hike in interest rates. In years past, this type of FOMC announcement has had great power to move rates, and there is “no consensus among economists” according to a recent Business Insider article as to whether or not the rate hike will be announced this week. So markets are playing the waiting game, and that means, at least on Monday, that mortgage loan rates were in what some might categorize as “defensive mode”. Rates don’t seem to be budging, and that means that best-execution, we see reports of 30-year fixed rate conventional mortgage loan interest rates hovering at or near 4.0%. FHA mortgage loan rates are still | more...

What if my home was damaged in a natural disaster?

September 15, 2015

FHA 203(k) Rehab Loans

By Joe Wallace

Not all borrowers want to get an FHA home loan for a home that is perfect and fully ready to occupy. Some are interested in fixer-upper properties, and we commonly receive reader questions in our comments section about them. Here’s a good example of a recent query: “… If I was interested in purchasing a property below market value and having a contractor repair the existing home on the property is there a loan that could potentially work in this situation?” The FHA/HUD official site has a page of information about the FHA 203(k) rehab loan that addresses this issue directly. According to the FHA official site: “Section 203(k) fills a unique and important need for homebuyers. When buying a house that needs repair or modernization, homebuyers usually have to | more...

September 14, 2015

FHA Home Loans and Legal Questions

By Joe Wallace

From time to time we get questions in the comments section about legal issues associated with an FHA home loan transaction. One of the most recent involved a situation where a reader tells us: “…the underwriter denied loan due to not enough in account for closing. The sellers realtor contacted our loan officer and asked if we had enough money to pay the closing costs our loan officer told her no, at that point the sellers realtor stated they did not know if they wanted to deal with us. Is that legal for our loan officer to give the sellers realtor this information…” It cannot be stressed enough that in situations where there is a legal question, a lawyer with experience in real estate law should be consulted. We cannot | more...

September 14, 2015

HUD 4000.1 Becomes Effective Today

By Joe Wallace

Today, Monday September 14, 2015, the new FHA Single Family Home Loan Policy Handbook takes effect. It’s called HUD 4000.1 and is now the reference for all FHA single family home loans. Up to now, certain parts of the handbook have been in effect, while other portions were printed but not effective until today’s launch date. A variety of policies have been superseded by the new guidebook, while others have been reproduced and ported over. The new Single Family Policy Handbook is broken down into five basic sections, and there is an FHA/HUD FAQ preview page that answers the most common questions about the new guide, certain changes, and restatements of existing policy. You can find that FAQ page at http://portal.hud.gov/hudportal/documents/huddoc?id=SFH_FAQ_Preview.pdf. It previews a variety of questions and their answers. | more...