Articles Published in: 2015

July 29, 2015

FHA Mortgage Loan Interest Rate Trends

For about ten business days now we’ve watched mortgage loan interest rates either hold steady or make small improvements. The gains aren’t dramatic enough from day to day to force much change in the best execution numbers we report here; instead borrowers likely notice the difference in closing costs. But whatever the case, ten days of rates that aren’t getting any higher is a good thing after the sustained upward trend we’ve witnessed this summer. Yesterday (Tuesday July 28) we saw the first day of slightly higher rates since that holding-to-slightly-improved trend began. The move higher certainly wasn’t enough to push rates out of their current comfort zones, so we have 30-year fixed rate conventional mortgage loans holding steady (best execution) at the 4.0% to 4.125% range we’ve been discussing | more...

July 29, 2015

FHA Loans And Your Credit

By Joe Wallace

A reader got in touch with us this week to ask if it is possible to get an FHA mortgage loan even if the borrower doesn’t have “perfect credit”. While it’s not clear what the reader means by that phrase, we can answer the question in a general way. The simple answer is yes, borrowers can apply for and get approved for FHA home loans with less than perfect credit, but much depends on the nature of the credit issues on your report and whether there’s an overall pattern of responsible credit use the lender can use to justify approving your home loan. FHA loan rules are clear that individual mistakes in a borrower’s past should not be the sole determining factor when it comes to approving or denying an | more...

July 29, 2015

FHA Refinance Loan Options

By Joe Wallace

Looking for a refinance loan? Do you know what your options are as a homeowner when it comes to refinancing from a non-FHA loan to an FHA mortgage? Or are you in need of an FHA-to-FHA refinance? There are many options available, some of which may surprise you. Did you know there is one type of FHA refinancing which has no FHA-required credit check? Borrowers who are currently paying on adjustable rate mortgages should take a close look at FHA refinance loan options for a variety of reasons. Those who have non-FHA loans can refinance into fixed rate FHA loans, or refinance into another adjustable rate mortgage (ARM)–FHA loan rules permit both options for qualified borrowers. Non-FHA borrowers looking to refinance into an FHA mortgage will be required to get | more...

July 28, 2015

FHA and HUD Recognize A Year Of Opportunity

By Joe Wallace

The FHA and HUD are reminding borrowers about an important change made to the FHA single family home loan program in conjunction with a new HUD press release titled, “A Year of Progress: Delivering on the Promise of Opportunity”. The Department of Housing and Urban Development is approaching its fifth decade of service. The press release states, “As HUD approaches its 50th anniversary, Secretary Castro is laser focused on advancing policies that provide folks with access to quality housing, good schools, transportation and economic opportunity. We recognize housing as a platform for Americans who are striving to improve their lives and break the cycle of poverty for the next generation. As needs for our services have increased, HUD will continue to invest in initiatives that have demonstrated outcomes in helping | more...

July 28, 2015

FHA Loans, Foundation Trouble, And Home Inspections

By Joe Wallace

A reader got in touch with us to ask about a situation where a home with foundation problems was purchased with an FHA loan. The reader says a home inspector was not hired because the foundation issue was “supposed to be taken care of” prior to the borrower moving in. Later, the borrower discovered that no corrections to the foundation had been made and further problems were discovered. The main question was whether or not the borrower has any legal recourse in situations like these. FHA loan rules and the FHA/HUD official site are very specific when it comes to borrowers who rely on FHA appraisals and their outcomes instead of hiring a home inspector to take a more in-depth look at the property. The FHA appraisal is not a | more...

July 27, 2015

FHA Loan Closing Costs and Down Payment

By Joe Wallace

A recent reader question in our comments section asked about whether closing costs are including in the FHA minimum 3.5% down payment. Is it true that an FHA loan down payment amount may include closing costs? To fully understand this issue, it’s good to know what can be included in closing costs for your FHA home loan. Closing costs include (but are not limited to) the following: Lender’s origination fee Deposit verification fees Attorney’s fees Appraisal fees and compliance inspection fees The participating lender’s origination fee Any title insurance or title examination Property surveys Credit report fees Certification fees Note that these fees do not have anything to do with the sales price or appraised value of the home. FHA loan rules say that the loan amount for an FHA | more...

July 25, 2015

FHA Mortgage Loan Interest Rate Trends: Creeping Toward Month-Long Lows

By Joe Wallace

Mortgage loan rates aren’t quite flat, but the amount of improvement we’ve seen over the last week has been very small. With that in mind, it’s a good thing that the trend has been lower. We haven’t seen rates move from their best execution comfort zones across the board, though our sources report that certain lenders may offer something slightly lower than the best execution rates we’ve been reporting here. Some are offering 30-year fixed rate conventional mortgage loans closer to the high three percent zone they were in much earlier this year than the 4.0% to 4.125% best execution range we’ve seen all week. FHA mortgage loan rates have not moved out of the range we reported previously. Best execution rates for FHA mortgages at the moment are between | more...

Can I buy a manufactured home with an FHA loan?

July 24, 2015

FHA Loan Questions: Late Payment History

By Joe Wallace

A recent reader question about FHA loans and missed payments reminds us how important it is to examine your credit report and repayment history on all financial obligations long before you apply for a new home loan. The reader wanted to know if late payments on a student loan would affect chances for FHA home loan approval. The question mentioned that the reader’s current mortgage loan is current, but that late payments on the student loan were on her credit record. Does this reader have a chance for a new FHA loan? The answer is complicated because of two things. A borrower with a current mortgage trying to apply for a new purchase FHA home loan would have to declare that the new home is to be the borrower’s primary | more...

July 23, 2015

FHA Loan Down Payments: How Your Lender Verifies Cash Saved At Home

By Joe Wallace

In our previous blog post we discussed some of the rules for down payment funds on an FHA home loan. Did you know the FHA requires its participating lenders to verify the sources of all down payment money? This is to prevent funds coming from unacceptable sources such as credit card cash advances or payday loans. Borrowers are permitted to bring in a down payment with money saved at home, but the FHA loan rulebook has specific instructions to the lender about how this type of down payment money is to be verified and handled. Chapter Five of HUD 4155.1 tells the lender that money saved at home should be verified with help from the borrower who must provide specific information about the funds. “To verify cash saved at home, | more...

July 23, 2015

FHA Loan Down Payment Rules: Acceptable Sources of Down Payment Funds

By Joe Wallace

A recent reader question in our comments section involved the source of down payment funds. The reader wanted to know if cash saved at home could be used to make an FHA loan down payment. The answer is simple, yet can get more complicated depending on circumstances. The FHA loan rules state that down payment funds must be verified. The reason for this includes requiring the lender to insure that down payment money does not come from payday loans, credit card cash advances or any other type of “non-collateralized” loan. FHA loan rules have a list of acceptable sources, which include (but are not limited to) proceeds from the sale of investments, property, bonds, etc. Cash saved at home is acceptable, as are trade equity, rent credit, even gift funds–provided | more...