Articles Published in: March 2016

March 23, 2016

Mortgage Rate Trends: Edging Higher

What is bad for the economy is often good for mortgage loan rates, and Tuesday’s world headlines should have, by all accounts, helped rates move lower. But all the bad news yesterday did not keep rates from moving slightly higher (for a variety of reasons) and it seems that we could be on the verge of a new upward trend depending on how rates behave over the next several business days. Tuesday’s move higher will likely be noticed mostly in closing costs rather than actual mortgage rate increases but your experience may vary depending on the lender. 30-year fixed rate mortgage loan interest rates moved into a different range of rates, now reported at a best-execution range between 3.75% and 3.875%. FHA mortgage rates are holding steady in their best | more...

March 22, 2016

How Much Can I Borrow With An FHA Mortgage Loan?

By Joe Wallace

One of the most common questions about FHA loans is, “How much can I borrow?” The answer to that question is a lot easier to get by using an online mortgage calculator to factor in the length or term of the loan, interest rate (estimated), estimated property taxes and other details. Some of the information you need to calculate how much you can borrow depends on circumstances. The interest rate, for example, is determined in part by what rates are on offer currently based on market conditions and other factors but also by your credit history and FICO scores. The better your FICO scores are, the better the interest rates. The borrower and the lender negotiate interest rates on FHA mortgages, they are not set or regulated by the FHA | more...

March 21, 2016

Mortgage Rate Trends: Slightly Lower Friday

By Joe Wallace

Friday closed out the week slightly lower, which means that a majority of last week brought some form of mortgage loan rate improvement or at the very least no moves higher. All days but one last week were marked by some kind of small gain, taking back some of the losses from the week prior. At the time of this writing, 30-year fixed rate conventional mortgages are in a best execution range between 3.625% (likely the most competitive lenders are offering something at or near this) and 3.875%. Our sources note that the average best execution rate offering likely falls somewhere in the middle of this range. FHA mortgage loan interest rates remain in their best execution comfort zone in a range we’ve reported for some time now–between 3.25% and | more...

March 18, 2016

Mortgage Loan Interest Rate Trends: Improving

By Joe Wallace

Thursday saw a decisive move lower for interest rates. After many days of upward movement, and some recovery earlier in the week following a Fed announcement (one that had no talk of another rate hike for now) it seems that rates are headed back down. This trend is being described by some market watchers as a delayed reaction to the Fed–are some lenders slower to update their mortgage loan interest rates due to recent volatility in the market? That’s what some are thinking. 30-year fixed rate conventional mortgages are now operating in a best execution range between 3.625% and 3.875%. That is a wider range than previously reported, though you will find variation among conventional lenders and your access to these rates depends greatly on your financial qualifications. (“Best execution | more...

March 17, 2016

FHA Loan Advice: Know Your Costs, Interest Rates

By Joe Wallace

We give a lot of advice both here and in our comments section about FHA home loans. And there’s a lot to give; FHA loan rules cover everything from the acceptable minimum condition of the home to a borrower’s credit requirements for maximum financing. But what does the FHA itself, as a government agency, say about the home buying process? Our publication is not associated with the FHA in any way, and what follows is the result of our research and examination of FHA-published material. What we have found is definitely information a potential borrower should consider during the planning stages of a new home loan or refinance loan. An FHA publication titled, Looking For The Best Mortgage has some excellent overall advice for the borrower starting with the old | more...

March 16, 2016

Mortgage Rate Trends: Some Improvement After Fed Announcement

By Joe Wallace

Mortgage rates improved a bit on Wednesday after the Fed made its much anticipated statement-one that included no discussion of a further raise in interest rates for now. How much changed today depends greatly on the lender, and some may see the difference in terms of closing costs as opposed to an outright shift in the mortgage loan interest rate. The improvement wasn’t dramatic, but in light of the recent upward trend, any recovery is welcome, however small. 30-year fixed rate conventional mortgages are still basically reported in a best execution range between 3.75% and 3.875%. FHA mortgage loan interest rates are still holding in the comfort zone range between 3.25% and 3.5% that we have been reporting for many days now. FHA mortgage loan rates are often slower to | more...

March 16, 2016

FHA Loan Rules for “Expected Income”

By Joe Wallace

It’s easy for borrowers to get nervous about their debt to income ratio when trying to qualify for an FHA mortgage. Some, who may be concerned that their ratio isn’t good enough may look to expected raises, performance bonuses, or other types of future earnings that haven’t begun yet in hopes that those extra earnings might give them a better chance at loan approval. But what do FHA loan rules say about this type of expected income? The issue is addressed on page 2o7 of HUD 4000.1, starting with the FHA definition of expected income, provided to clear up any confusion over what may or may not be counted as such: “Expected Income refers to income from cost-of-living adjustments, performance raises, a new job, or retirement that has not been, | more...

March 15, 2016

FHA Refinance Loan Basic Requirements

By Joe Wallace

FHA refinance loans offer a variety of options for the borrower. In many cases you don’t have to have an existing FHA loan in order to refinance into one; with certain types of FHA refinancing you do have to have an FHA loan. There are cash-out refinance loans available, no-cash-out, and streamline refinances available. Do you know which one is right for you? FHA loan rules found in HUD 4000.1 list the available types of refinancing available, as well as the borrower eligibility requirements, on page 126. It begins by stating: “FHA insures several different types of refinance transactions: 1. No cash-out refinances of FHA-insured and non FHA-insured Mortgages are designed to pay existing liens. These include: Rate and Term refinance, Simple Refinance, and Streamline Refinance. 2. Cash-out refinances are | more...

March 14, 2016

Mortgage Loan Interest Rate Trends: Pushing Higher

By Joe Wallace

Mortgage loan interest rates moved higher last week–every day except one (Tuesday) saw small moves that, over time, have pushed rates closer to 4.0% (for 30-year fixed rate conventional mortgages) best-execution. 30 year fixed-rate mortgages ended the week on Friday at a best execution range between 3.75% and 3.875%. In some cases the move higher is reflected in closing costs rather than an actual rate change. But if the upward trend persists we could see this range disappear in favor of 3.87% or a new range with 3.875% at the low end. FHA mortgage rates have remained in their best execution comfort zone range between 3.25% and 3.5% but it is likely not long before this range goes away. FHA rates do take their time catching up to the changes | more...

March 11, 2016

FHA Loans And Your Credit Report: HUD 4000.1 Guidelines

By Joe Wallace

We get many questions about FHA loan credit standards. Some examples: “I have a charge-off on my credit report. Am I still eligible for an FHA mortgage?” “My credit reports show some missed payments on student loans. Will this affect my ability to get an FHA mortgage?” These are definitely questions worth asking long before you start the house hunting process. Some borrowers are concerned with FICO score issues, others may have disputed accounts, or collection actions on their credit record. These things can worry a future home loan applicant, and with good reason–some credit issues are a barrier to loan approval, while others may not be quite so serious. Knowing what a lender is required to collect with regard to your credit data is a good way to ease | more...