Articles Published in: February 2017

February 13, 2017

Mortgage Rate Trends: Higher

Mortgage loan interest rates went higher on Friday, undoing some of the gains made earlier in the week but keeping things within the range we’ve been looking at since the start of 2017. The move higher wasn’t enough to push many lenders away from their earlier offerings; affected borrowers likely saw the results of Friday’s move reflected in closing costs in some markets, where actual changes to the rate may have occurred with some lenders. 30-year fixed rate conventional mortgages were reported in a range between 4.125% and 4.25% on Friday (best execution). FHA mortgage rates remain in their 3.75% comfort zone. The ups and downs, give-and-take activity of recent weeks isn’t really enough to push FHA mortgage rates out of that zone without either a day’s worth of dramatic | more...

FHA Loans And Natural Disasters: What You Should Know

February 10, 2017

FHA UFMIP Refunds: A Reader Question

By Joe Wallace

Is the FHA Up Front Mortgage Insurance Premium or UFMIP refundable? A reader got in touch with us in the comments section this week to ask us a question in that area: “Is there any return of the UFMIP when refinancing out of an FHA loan to conventional? If so, what is the proration amount or percentage of fees refunded? over 6 months, 12 months, 18 months, 24 months?” This insurance premium on FHA mortgages is refundable under a specific set of refinance loan circumstances, but not for all loans. FHA loan rules in HUD 4000.1 address the issue directly; on page 156 we learn the following: “The UFMIP is not refundable, except in connection with the refinancing to a new FHA-insured Mortgage.” HUD 4000.1 states that Up Front Mortgage | more...

February 9, 2017

FHA Loans: Purchase, Rehab, Refinance

By Joe Wallace

FHA loans are a good option to consider, especially if you are looking for an alternative to the comparatively high down payment requirements of many conventional mortgages. But do you know all of your FHA mortgage options? HUD 4000.1, the FHA single family home loan rule book, describes the basic options borrowers can choose from. FHA loans are not just for new purchases-you can apply for a refinance loan, or you can apply to purchase and rehab a property you intend to live in as your primary residence. HUD 4000.1 describes your FHA loan options starting with the most typical FHA mortgage: Purchase Loans and Construction-to-Permanent Loans “The Borrower may finance the purchase of an existing one- to four-unit residence, and may also finance construction of a one- to four-unit | more...

February 9, 2017

Mortgage Rate Trends: Improving

By Joe Wallace

There are factors that directly affect mortgage loan interest rates, and there are those that work more indirectly. Economic data, breaking news, and sometimes even the overall mood of investors on a given day or in a given week could be factors in which way rates are moving. Right now, investors seem very keen on putting money into less risky avenues (such as bonds), and that is one thing that is helping rates improve this week. We’ve seen an overall downward trend in the last few business days that has resulted in 30-year fixed rate conventional mortgages creeping back towards the bottom part of the range we’ve seen rates hover in since the start of 2017. At the time of this writing, 30-year fixed rate conventional mortgages are at or | more...

February 8, 2017

Second Appraisal For An FHA Loan? The Rules You Should Know

By Joe Wallace

There are times when a borrower or even the seller may not agree with the results of an FHA appraisal. Does the FHA loan rule book, HUD 4000.1, permit the request of a second one? Under what circumstances might another one be allowed? According to page 123 of HUD 4000.1, simply disagreeing with the fair market value determination of the original-likely one of the most common reasons to look into a second attempt-isn’t enough to justify such a request. “The Mortgagee is prohibited from ordering an additional appraisal to achieve an increase in value for the Property and/or the elimination or reduction of deficiencies and/or repairs required.” Second appraisals “may only be ordered if the Direct Endorsement (DE) underwriter (underwriter) determines the first appraisal is materially deficient and the Appraiser | more...

February 8, 2017

HUD Charges Oklahoma Landlords With Fair Housing Act Violations

By Joe Wallace

Fair Housing Act laws help protect house hunters no matter what phase of the process they might be at, and it also offers protections for those seeking rental housing. Violations of Fair Housing laws can hinder those hoping to buy with FHA loans, conventional loans or other mortgages at some point, even if they aren’t actively looking to purchase at the moment. That’s why we report on Fair Housing cases from time to time-current and future loan applicants should know their rights and what to do if they encounter unfair treatment along the way. HUD recently announced on its official site that it is bringing charges against Oklahoma landlords for violations of Fair housing law. According to a press release on the HUD site that, “…it is charging the landlords | more...

February 7, 2017

Mortgage Loan Interest Rate Trends: Two-Week Lows

By Joe Wallace

Mortgage rates took a move lower on Monday to levels many have been hoping to see more of in the last two weeks. Though the move does not dramatically change mortgage loan interest rate numbers, could we be on the start of a short-term trend due to global economic uncertainty? Some of our sources seem to think that at the very least, today’s downward movement was inspired by investors seeking safer havens, with mortgage rates reaping the benefit of their investment activity. 30-year fixed rate conventional mortgages are now reported in a best-execution range between 4.125% and 4.25%. Affected borrowers may notice the changes reflected in closing costs rather than an actual rate adjustment. FHA mortgage rates continue in their best execution comfort zone at 3.75%. FHA rates often take | more...

February 6, 2017

FHA Loans Following Short Sale Or Foreclosure

By Joe Wallace

Hands down, some of the most-asked questions we get in our comments section involve the FHA loan rules for borrowers who have a short sale or foreclosure on their credit record. It’s easy to assume that a new home loan isn’t possible after a short sale or foreclosure, but is this true? There are several factors that can determine whether a borrower is able to get a new loan or not under such circumstances, and it’s very important to remember that your credit activity, state law, lender standards, and your FICO scores will all play a role in whether a new loan can be approved or not. FHA loan rules often set benchmarks in this area but don’t have the final word when state law or lender standards also come | more...

February 6, 2017

Mortgage Rate Trends: Higher, Lower

By Joe Wallace

Last week, mortgage rate numbers basically see-sawed within the range we’ve been looking at ever since the new year began. Mortgage rates began last week lower, but moved up and down from Wednesday on due to a variety of economic data releases and investor reaction to them. The Fed also made a statement last week that negatively affected rates. The causes of the ups and downs are not directly tied to rate performance, but investor reaction to the economic developments and data of last week does affect rates. Overall, we’re seeing about the same rates at the time of this writing as we reported last week, more or less, but changes in closing costs will be apparent to borrowers affected by those changes. At the time of this writing, 30-year | more...

February 3, 2017

Non-Occupying Co-Borrowers: A Reader Question

By Bruce Reichstein

FHA loan rules state that in cases where there are non-occupying co-borrowers, different down payment requirements may apply. According to FHA loan rules, “A Non-Occupying Borrower Transaction refers to a transaction involving two or more Borrowers in which one or more of the Borrower(s) will not occupy the Property as their Principal Residence.” A reader got in touch recently to ask a question about the FHA loan down payment requirement in situations that feature non-occupying co-borrowers. “I see below under 4155.1 (page 78 of 413) that unrelated individuals that can document evidence of a longstanding, substantial family type relationship would qualify for maximum financing. So since a cousin is classified as unrelated yet they’ve know each other since birth and have been living as family since then would then qualify | more...