Articles Published in: 2015

September 2, 2015

FHA Mortgage Loan Interest Rate Trends: Slightly Higher

Mortgage rates have ranged from unchanged to slightly higher this week, depending on the lender. There is a great deal of volatility present and part of the unchanged-to-slightly-higher activity we’ve seen this week is due to a possible rate hike by the Fed as early as September. Our sources report no clear indication as to whether September is the month when interest rates finally do get a hike by the Fed, but a jobs report due out on Friday could be a strong indicator as to which way the Fed might go in the coming month. Or it may not, depending on the contents of that report. “Wait and see” is the going advice seems to include the word “lock” a great deal when it comes to deciding whether to | more...

When Is An FHA Loan Better Than A Conventional Loan?

September 2, 2015

FHA Loan Questions: Late Payments Prior To Loan Application Time

By Joe Wallace

We get plenty of credit-related questions about FHA home loans and refinance loans in our comments section. One recent question that came in has to do with late payments on financial obligations prior to filling out an FHA mortgage application. The reader mentioned having late payments in the last year in addition to having a credit score in the mid-500s. “Can this affect my chances for FHA loan approval?” is the most common of questions, and naturally the answer is dependent on circumstances. In general, FHA loan applications are best turned in when the borrower has a solid 12 months of on-time payments for all financial obligations. Borrowers with otherwise outstanding credit and/or “compensating factors” may find a lender more forgiving if there is an issue with credit history, but | more...

September 2, 2015

Some Frequently Asked Questions About The New FHA Loan Rules In HUD 4000.1

By Joe Wallace

On September 14, 2015, a new FHA single-family home loan policy handbook takes effect. It’s known as HUD 4000.1 and has several updates, changes and revisions that will take effect on the 14th. There have been some frequently asked questions about some of the details found in the new handbook–the FHA and HUD have published some answers to those questions in anticipation of the launch date for the new rule book. Here are some of those examples as printed on the FHA/HUD official site–one of the top questions? Whether referral fees will be permitted for the origination of FHA single family mortgage loans. The answer: “The lender, or any of the lenders employees, must not pay or receive, or permit any other party involved in an FHA-insured mortgage transaction to | more...

September 1, 2015

FHA Appraisal Questions: Peeling Paint And Paint Chipping

By Joe Wallace

FHA appraisals can be tricky to understand, depending on the outcome. For example, we get asked several times a year why an FHA appraiser required corrections on cracked or peeling paint on surfaces in a given home. The question is usually associated with the seeming cosmetic nature of these corrections. “Why,” the readers will ask, “is this a must-fix when it’s just some paint peeling off a windowsill or door frame?” The answer in this particular case has a lot to do with lead abatement. Depending on the age of the home, lead paint may or may not be present. The FHA appraisal process requires mandatory correction of peeling paint in order to reduce potential or actual lead hazards. It’s true that this could, in certain cases, be perceived as | more...

September 1, 2015

FHA Loan Rules: Changes Coming

By Joe Wallace

On September 14, 2015, a new FHA Single Family Home Loan rule book will become the official collection of rules and regulations for all FHA single family mortgage loans. Known as HUD Handbook 4000.1, this volume has been getting a variety of updates since it was made available online in May of 2015. There are a collection of changes, additions, and clarifications to FHA single family home loan policies including quality control, compliance, oversight, how to do business with the FHA and much more. At the time of this writing, some changes/updates have not been finished yet, such as the instructions on electronic delivery of FHA appraisals. There is currently an FHA Frequently Asked Questions .PDFthat addresses some of the changes that will go into effect on September 14, 2015 | more...

August 31, 2015

FHA Loan Rules: Divorce and Separations

By Joe Wallace

We frequently handle reader questions in the comments section regarding FHA loan policies that affect borrowers going through a legal separation or divorce. In some cases, the questions have a lot to do with why a lender may require the spouse’s credit information or other details even though the couple is legally separated. One recent question addressed just that-the FHA loan applicant was being asked by the lender about spouse credit issues even though there was a legal judgment or ruling stating the couple was legally separated and not involved in joint credit or shared debt according to the terms of the legal agreement. Why would the lender, the reader wondered, still require the spouse’s financial or credit information? Unfortunately, there is no one specific answer to give. Some states | more...

August 31, 2015

FHA Loan Questions: Title Problems

By Joe Wallace

What follows should not be construed as legal advice. As a general rule, it’s a smart philosophy to seek legal advice for a lawyer and be wary of legal guidance from a non-lawyer. The best legal advice any non-lawyer can dispense is, “talk to a lawyer”. A reader got in touch recently with a question about FHA refinance loans. He asked about a situation where the bank’s title search uncovered a lien against the property from a third party. “…Title search showed that the property was also deeded to another person that had a lien on the property.” “We went to two trusted lawyers that advised us to file Bankruptcy because the other property owner was in trouble with the law and that the Title insurance we paid for was | more...

August 29, 2015

FHA Mortgage Loan Interest Rate Trends

By Joe Wallace

After three solid days of upward movement on interest rates for mortgage loans in general, Friday’s market activity was such that there was no general shift in rates either way–much of the differences seen in Friday’s interest rates would depend on the lender. According to our sources, some were slightly higher, others slightly lower. Some will notice higher or lower actual rates; others will notice the changes in the form of altered closing costs, depending on the lender. 30-year fixed-rate conventional mortgage loans remained in a best-execution range of rates between 3.875% ad 4.0% depending on the lender. FHA mortgage rates continued in their long-held best execution comfort zone of 3.75%. FHA rates tend to vary more among lenders than 30-year fixed rate conventional equivalents, so do some comparison shopping | more...

August 28, 2015

FHA Announces New Guidelines For Energy Efficient Upgrades

By Joe Wallace

The FHA has issued a press release announcing new guidelines for FHA borrowers who want to add energy-efficient upgrades to their homes. According to HUDNo.15-112, the announcement comes as part of the White House National Clean Energy Summit. The Obama Administration and FHA have new guidelines, “supporting borrowers seeking to make energy efficient improvements to their homes. In todays announcement, FHA expressed the intent to allow borrowers to use Single Family FHA financing for properties with existing Property Assessed Clean Energy (PACE) loans that meet certain conditions” according to the press release. These new tools will help homeowners make smart choices for their pocketbooks and for the environment, said HUD Secretary Julin Castro, quoted in the press release. Castro adds, HUD and the Obama Administration are proud to invest in | more...

Can I buy a manufactured home with an FHA loan?

August 28, 2015

FHA Loan Rules, Lender Standards, And Your FHA Loan Application

By Joe Wallace

Some of the most common questions we get asked in the comments section (where we field all our reader questions about FHA loans and refinance loans) involve what seem to be gray areas surrounding an FHA mortgage. For example, “Will a certain condition in the home make the property fail the FHA appraisal?” or, “How low can my FICO score be?” Some portions of the FHA loan process are dealt with specifically in FHA loan rules. For example, borrowers with FICO scores lower than 500 are not eligible for an FHA loan. Borrowers who are currently delinquent on Federal debts may have difficulty getting loan approval until the situation is resolved with payment or a payment plan. Certain types of conditions–homes located within a high pressure gas pipeline easement, for | more...