Articles Published in: October 2016

How much can I borrow with an FHA refinance loan?

October 13, 2016

FHA Refinance Loans: What Are Your Options?

FHA loans aren’t just for new purchases. You can also apply for an FHA refinance loan for an existing FHA mortgage, a conventional loan, or other types of mortgages depending on the type of refinancing you need. HUD 4000.1 describes the rules for FHA refinance loans, including a basic list of all the types of refinancing available and what they are meant to do for the borrower: -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. -Cash-out refinances are designed to pull equity out of the Property. -Refinances of non FHA-insured Mortgages are available for qualified Borrowers in negative equity positions (Short Refi). -Refinances for rehabilitation or repair (Section 203(k)). That information is | more...

FHA One-Time Close Construction Loans In 2019

October 13, 2016

Second Appraisal Rules For FHA Mortgages

By Joe Wallace

There are some circumstances where a borrower may wonder about requesting a second appraisal on a property to be purchased with an FHA mortgage. For example, if the loan applicant decides to switch lenders, is a new appraisal required? What about cases where there’s a disagreement over the results of the appraisal? Many of the answers to these questions are circumstantial-it all depends on the nature of the request. Sometimes a second appraisal may be permitted IF conditions described in HUD 4000.1 exist. But in other cases a second appraisal is simply not permitted. One good example of that-a borrower or seller cannot request a second appraisal to increase the fair market value of the property. However, if “material deficiencies” are suspected in the original appraisal, the market value of | more...

October 12, 2016

HUD Announces Relief Measures Following Hurricane Matthew

By Joe Wallace

The Department of Housing and Urban Development has announced relief measures following Hurricane Matthew. According to the HUD official site, “U.S. Housing and Urban Development Secretary Julian Castro today announced HUD will speed federal disaster assistance to the States of North Carolina, Florida, and Georgia and provide support to homeowners and low-income renters forced from their homes due to Hurricane Matthew.” The HUD press release announcing this relief also ran a list of areas President Obama issued a disaster declaration for-the following counties have been declared federal disaster areas: North Carolina: Beaufort, Bladen, Columbus, Cumberland, Edgecombe, Hoke, Lenoir, Nash, Pitt, and Robeson. Florida: Brevard, Duval, Flagler, Indian River, Nassau, St. Johns, St. Lucie and Volusia. Georgia: Bryan, Camden, Chatham, Glynn, Liberty, and McIntosh. According to the press release, HUDNo.16-155, “The | more...

October 12, 2016

Mortgage Loan Interest Rate Trends: Moving Higher

By Joe Wallace

Mortgage loan interest rates have been in a short-term trend with no improvements and/or upward movements for well over seven business days. Some market watchers believe this trend will persist a bit longer, and even though the highest rates we’ve seen in the trend are still considered low compared to previous years, it makes for a difficult choice for any borrower on the fence about locking or floating. 30-year fixed rate conventional mortgage loan interest rates are still within a range between 3.5% and 3.625%, but there are far fewer lenders offering the bottom end of that best-execution range. 3.625% is far more common, best execution. As upward pressure continues (assuming it WILL continue in the short term) we will eventually see that range disappear in favor of the higher | more...

October 11, 2016

Flood Zone Rules For FHA Loans

By Joe Wallace

A reader asks, “Can you please state what the guides are for manufactured homes in a flood zone?” FHA loan rules for ANY type of property include the following guidelines for flood zones: “The Mortgagee must determine if a Property is located in a Special Flood Hazard Area (SFHA) as designated by the Federal Emergency Management Agency (FEMA). The Mortgagee must obtain flood zone determination services, independent of any assessment made by the Appraiser to cover the Life of the Loan Flood Certification.” Furthermore, FHA loan rules state that any type of property to be purchased with an FHA mortgage loan would not be eligible when the following circumstances apply: -a residential building and related improvements to the Property are located within SFHA Zone A, a Special Flood Zone Area | more...

October 11, 2016

FHA Appraisals: A Reader Question

By Joe Wallace

A reader asks, “If a person purchased a home with an FHA loan, and later found out that there were serious mold issues with the home that had been covered up with sheets of drywall and structural issues with a foundation which is collapsing and joists sagging due to not building to code.would there be any recourse for the owner of a home that now cant afford to do the necessary repairs to fix?” These are serious issues, and unfortunately there is no one set answer-much depends on the circumstances involved. There are several questions which can affect the answer including whether or not the borrower paid for a home inspection in addition to the FHA appraisal. The FHA official site warns borrowers in no uncertain terms that the FHA | more...

October 10, 2016

Adding To The FHA Loan Amount

By Joe Wallace

When preparing to fill out an FHA loan application, many borrowers wonder how much FHA loan they will be permitted to get, and whether they can increase that amount. The basic FHA loan rules in HUD 4000.1 state that the loan amount is determined by either the appraised value of the property or the asking price, whichever is lower. Some want to know if they can get cash back on an FHA new purchase single family home loan, but the rules prevent a borrower from receiving cash back on new purchase loans except in the form of a legitimate refund. There are ways to increase the loan amount, however, that do not result in cash back to the borrower. For example, the borrower who chooses to finance the Up Front | more...

October 10, 2016

Mortgage Loan Interest Rate Trends: Upward Trend

By Joe Wallace

For the past five business days, mortgage loan interest rates have been in an upward trend. Even after last week’s Employment Situation Report, which had weaker jobs data that anticipated, rates were still on a short-term upward swing. The employment report and mortgage loan rates aren’t directly tied together, but investor behavior associated with that report often has rates moving lower in the wake of weak jobs data. This time, investor behavior all but ignored this, and the week ended with rates closing out in a range for conventional mortgages higher than we’ve seen in a little while. 30-year fixed rate conventional mortgages closed out Friday in a range between 3.5% and 3.625% best execution. FHA mortgage loan interest rates are still holding in their 3.25% comfort zone, but if | more...

October 7, 2016

Natural Disasters and FHA Mortgages

By Joe Wallace

Natural disasters are a serious issue for home owners, whether they have just closed, paid off their mortgages, or are somewhere in between. When a hurricane strikes, when flood waters rise, or when other acts of nature threaten, damage or destroy homes, many aren’t sure where to turn or what to do first. FHA mortgage loan options in these cases depend on a variety of factors, but there is help available to rebuild and recover. FHA mortgage options include 203(k) and 203(h) loans (including refinance loans) that can help home owners recover, but what do to in the meantime? The first thing a home owner should do is contact FEMA to see what assistance may be available on a federal level. For the most recent (at the time of this | more...

October 6, 2016

Self-Employed Borrowers: FHA Loan Rules

By Joe Wallace

A growing number of Americans are either self-employed, contract workers, freelance, or otherwise employed in ways that don’t involve being on a company payroll and receiving traditional benefits, and health insurance. FHA home loans are definitely possible for those who are freelance, self-employed, etc. but it’s important to know what the FHA requires on a basic level for applicants who work in this way. HUD 4000.1 has some instructions to the lender for verifying self-employment income, for example, and these instructions may involve more paperwork than for other types of borrowers. To start, HUD 4000.1 spells out its definition of self-employment income: “Self-Employment Income refers to income generated by a business in which the Borrower has a 25 percent or greater ownership interest.” That may seem different than freelance income | more...