Articles Published in: May 2016

May 5, 2016

FHA Loans and FICO Scores: Fact and Fiction

Some potential FHA borrowers have questions about FHA loan credit score requirements. It’s easy to hear part of story when it comes to other people qualifying for an FHA mortgage and assume you’ve gotten all the facts, but the reality is that FHA loan rules and credit score requirements aren’t the whole picture. Lender standards also have a say in loan approval. That is why FHA loan rules, which specify a FICO score starting at 580 (for maximum financing), don’t have the final say. Lender standards also apply, and those standards (provided they are applied in accordance with federal law) will also factor into the application process. An FHA loan fact: FICO scores below 500 are not permitted. An FHA loan fiction: Anyone with a FICO score in the mid | more...

May 4, 2016

HUD brings Fair Housing Charges Against New York Co-Op

By Joe Wallace

The month of April may have been Fair Housing Month, but the work of the Department of Housing and Urban Development continues in the cause of ending housing discrimination. One of the latest press releases from HUD involves an investigation of alleged housing discrimination in New York. According to a press release on the HUD official site, “The U.S. Department of Housing and Urban Development (HUD) announced today that it is charging a White Plains, New York, co-op with housing discrimination for refusing to grant an exception to its policies that would allow a person with disabilities to buy a unit there. HUDs Office of Regional Counsel for New England, which has jurisdiction over the case, issued the Charge of Discrimination on April 26”. Such discrimination is not permitted under | more...

May 4, 2016

Mortgage Rate Trends: Back to Previous Lows

By Joe Wallace

Since our last look at mortgage loan interest rates (which were moving higher) we’ve seen stock market woes affect mortgage rates. As plenty of professionals will tell you, stocks don’t have a specific tie with mortgage rates, but investor reaction to woes of the market can and often do affect mortgage loan interest rates. So while you won’t see a reciprocal effect with stocks (better or worse stock performance directly changing mortgage loan interest rates) you may notices that under the right circumstances, the kind of behavior happening now. And that behavior is essentially, based on our sources, that stock market troubles this week are helping mortgage rates. 30-year fixed rate conventional mortgages have slid back down to 3.625% best execution, down from the range between 3.625% and 3.75%. FHA | more...

May 3, 2016

HUD: $37 Million To Fight Housing Discrimination

By Joe Wallace

The Department of Housing and Urban Development has announced $37 million in funding to fight housing discrimination. According to a press release on the HUD official site, the most recent announcement is one of three notices designed to, “support a variety of important fair housing activities, including fair housing testing in the rental and sales market, public education efforts, capacity building, and education and outreach activities.” The work HUD’s fair housing partners do every day is critical to our efforts to ensure that every family in America has an equal shot at finding the home that is right for them, said HUD’s Assistant Secretary for Fair Housing and Equal Opportunity Gustavo Velasquez, who was quoted in the press release. These grants help to provide the critical financial resources they need | more...

May 3, 2016

FHA Loan Rules: Cash to Close

By Joe Wallace

One of the most common questions we are asked in the comments section involves the nature of a borrower’s required minimum investment-the down payment-for an FHA mortgage. Some potential borrowers want to know if they can finance the down payment, others want to know if other closing costs might be counted as part of the down payment. In both cases the answer is no. Closing costs are separate from the borrower’s required 3.5% minimum down payment according to HUD 4000.1. Furthermore, the down payment must be paid in cash at or before closing time and cannot be financed into the loan amount. The money needed for a borrower’s down payment and certain closing costs are regulated by FHA guidelines. For example, a borrower can’t come up with a down payment | more...

May 2, 2016

Budgeting and Planning For Your FHA Loan

By Joe Wallace

If you are planning to apply for an FHA loan soon and are still in the planning stages of that loan, there are some expenses you can anticipate and save up for. Some borrowers may be interested in financing some of the costs associated with a new loan, but paying them up front can help save money over time. Those who choose to pay these costs up front are often looking at their mortgage loan over the long term. Those who choose to finance certain expenses where permitted may be trying to save money up front. Whichever option you choose, it pays to be an informed borrower-even if you know in advance you want to finance certain expenses. FHA loans and refinance loans have different rules for what expenses can | more...

May 2, 2016

Mortgage Loan Interest Rate Trends: Improving

By Joe Wallace

Mortgage loan interest rates had started moving higher in the last ten business days–seven out of then had rates either creeping higher or holding steady after doing so. But in the last three business days, we’ve watched rates begin to move back downward, pushing 30-year fixed rate conventional mortgages back into a range of rates. Professional market watchers report that conventional rates have a higher degree of variation lately due to market volatility, but in general 30-year fixed rate conventional mortgages are at a best-execution range between 3.625% and 3.75%. FHA mortgage rates are still in a range between 3.25% and 3.5% best execution. Best execution rates aren’t available to all borrowers or from all lenders–your experience may vary depending on FICO scores, loan repayment history and other financial qualifications. | more...