Articles Published in: 2016

July 7, 2016

FHA Loan Terms

Understanding Your Loan Term from FHA.com on Vimeo. How long is an FHA mortgage? The answer to that question depends on a variety of factors including the initial choice of fixed or adjustable rate mortgage, whether you plan to pay off the loan early or not, whether you plan to refinance, etc. The typical length of a fixed rate, new purchase FHA mortgage can be 15 or 30 years. If you are refinancing, other variables may apply. Choosing a loan term depends on the individual borrower’s specific needs and goals. You may wish to apply for a 15-year mortgage if you are interested in saving money over the lifetime of the loan; borrowers who choose 15-year mortgages will make higher monthly payments than those who choose 30-year loans, but the | more...

July 7, 2016

Mortgage Rate Trends: Still Moving Lower

By Joe Wallace

Mortgage rates moved lower for an eighth straight business day on Wednesday. We’re devoting some extra coverage to rates this week as the historic lows continue, but it’s entirely likely that our next report in the short term could be on rates moving higher; this is a common factor in prolonged short-term rate improvements. There has been, in the past, a string of days where rates move lower due to a variety of factors, then a “bounce back” where the trend is broken due to economic data releases, breaking news, or some other issue that puts upward pressure back onto mortgage loan rates. Eight days of a downward trend is a long time in the short term, and while Brexit drama has been dominating the headlines and influencing rates here | more...

July 6, 2016

FHA Announces Changes To Distressed Note Sales Program

By Joe Wallace

The FHA has announced changes to its Distressed Assets Stabilization Plan that would “have purchasers of severely delinquent mortgages offer qualified borrowers principal reductions and protection from payment shock,” according to the official site. An FHA press release states, “Certain families with distressed mortgages insured by the Federal Housing Administration (FHA) may soon be eligible for a reduction of their outstanding loan amounts should their mortgages be sold through DASP” and steps are being taken to prevent blighted neighborhoods. “FHA’s latest enhancements prohibit investors from abandoning low-value properties in high-foreclosure neighborhoods to prevent blight. FHA is also offering greater opportunity for non-profit organizations, local governments and other governmental entities to participate in DASP. Loans are not eligible to be sold through DASP unless and until all FHA loss mitigation efforts | more...

July 6, 2016

Mortgage Loan Interest Rate Trends: Even Lower

By Joe Wallace

Tuesday marked the first day back from the long holiday weekend, and it brought with it lower rates. That makes seven consecutive business days in a row that mortgage loan rates have improved, and conventional rates are now in some cases, best execution, in line with FHA mortgage loan interest rates. We’ve seen a general downward trend in mortgage loan rates ever since Britain voted “leave” in its national referendum on staying in or leaving the European Union. The fallout from the “leave” vote continues, and as a result the negative economic consequences have helped rates stay low. 30-year fixed rate conventional mortgages are being reported (at the time of this writing) between 3.25 and 3.375% best execution. Compare that to FHA best execution rates of 3.25% and it’s clear | more...

July 5, 2016

FHA Loan Questions: No Money Down Loans

By Joe Wallace

A reader got in touch with us recently to ask about an important aspect of FHA mortgage loans-the down payment. “I would be a first time buyer, 3 years full time work history, only car payment bill which is paid on time with auto pay from bank. looking for a single home, I am single with credit score of 797. However I have no down payment…would I qualify for an FHA loan?” HUD 4000.1 addresses the rules and regulations for FHA home loans and refinance loans. It includes, on page 155, a definition of what the FHA considers a down payment (the “minimum required investment”) and the “Total Required Investment” needed from the borrower. From HUD 4000.1: “Total Required Investment refers to the amount the Borrower must contribute to the | more...

July 5, 2016

FHA Loans For Military Members

By Joe Wallace

There are a variety of reasons why a military member would consider buying a home with an FHA mortgage, including the desire to own a home instead of renting in a crowded military rental market. While it’s true that VA home loans are available for military members as part of their benefits, some may choose the FHA option instead. What should a military member know about FHA mortgages and refinance loans? The first thing some borrowers need to know is that, yes, it is possible to refinance a VA mortgage into an FHA mortgage loan. FHA refinance loans permit the refinancing of non-FHA mortgages for cash-out refinancing and “non-streamline” refinance options. You do not have to use your existing lender to refinance into an FHA mortgage, instead a borrower is | more...

July 4, 2016

Happy 4th of July!

By Joe Wallace

Happy Independence Day! Our regularly scheduled posting scheduled returns tomorrow. Today, banks and markets are closed in observance of the holiday, but on Tuesday July 5th, it will be business as usual for them and for us. Have a safe, fun holiday!

July 1, 2016

Mortgage Loan Interest Rate Trends: Slightly Lower

By Joe Wallace

We’ve devoted some extra time to our coverage of mortgage loan interest rate trends this week, due in part to the lows rates have fallen to, and how rates have been affected by Brexit headlines. Ever since the “stay or go” vote in Britain, we’ve seen that issue make a significant impact on many non-Brit markets including our own. Rates plunged to three-year lows or very near to them in the wake of the “leave” win in the Brexit vote. Now, markets have had some time to adjust but there is still plenty of potential for volatility depending on developments overseas and investor reaction to them. That goes for other financial issues too, not just Brexit drama. Indeed, stateside economic data releases could also affect rates in the meantime, though | more...

June 30, 2016

HUD Publishes Early Findings From Home Buyer Literacy Study

By Joe Wallace

Financial literacy is an important part of being a well-informed home buyer. For those just starting out on the journey toward home ownership, there can be a great deal of learning to do; how FICO scores affect your ability to purchase a home, how open lines of credit can and often do factor into a lender’s decision to approve or deny a mortgage, etc. HUD launched a study to see how home buyer education and certain types of financial counseling might make a difference to house hunters. According to a recent press release at the HUD official site, “The U.S. Department of Housing and Urban Development (HUD) today published early findings from a rigorous, large-scale, random assignment study on the benefits that housing education and counseling provides to first-time homebuyers.” | more...

June 30, 2016

Mortgage Rate Trends: Holding At Multi-Year Lows

By Joe Wallace

Mortgage rates are still holding at or near 36-month lows. Brexit drama continues to be a factor in the low rates, but some market watchers believe that we’re about to see the first increase in rates soon, if for no other reason than what’s termed “bond market weakness” that could be an indication things are about to change soon. But there is a three-day weekend ahead, and things tend to get a bit conservative around the holiday. Rates could, based on previous holiday activity, go into “defensive mode”, not changing dramatically one way or the other. On the other hand, we have seen assumptions like that proven wrong due to breaking news, changes in investor behavior, etc. In other words, yes rates are low now, but it’s not safe to | more...