Articles Published in: March 2017

March 6, 2017

Mortgage Rate Trends: Higher

Mortgage loan rates have been rising in small increments for the last five business days-Friday’s move upward was small but is still part of that overall upward trends. The Fed is likely to announce an interest rate hike at their meeting on the 15th, which won’t help the mortgage rate environment, but by the time that hike is announced rates are likely to already reflect any negative consequences (on mortgage rates). What is good news for the economy is often bad news for mortgage loan interest rates. The Fed raising rates is an indicator that the economy is stronger, and investor reaction to that climate can and often does have a negative effect on mortgage rates. At the time of this writing, 30-year fixed rate conventional mortgages are reported at | more...

March 3, 2017

Are You Ready For An FHA Mortgage Application?

By Joe Wallace

If you are thinking about filling out an FHA mortgage application, there are a few questions to ask yourself before you do-if you’re ready to apply for an FHA loan, you’ll have the answers ready. How Much Down Payment Money Do You Have? In the planning stages of buying a new home, one of the most important things you can do early is determine how much home you can realistically afford. Using a mortgage calculator can help you estimate how much you need. Since FHA home loans typically require a minimum 3.5% down based on the adjusted price of the home, you can get an estimate of how much will need to be saved up to make that down payment. Know how much you’ll need-at least a rough estimate-early in | more...

How much can I borrow with an FHA refinance loan?

March 2, 2017

FHA Loan FICO Score Rules

By Joe Wallace

What are the FHA loan program’s FICO score requirements? That’s a common question, and a good one to ask as there are several things to keep in mind about how the FHA and participating lenders will view your credit scores. FHA loan rules say that borrowers with FICO scores between 500 and 579 are technically eligible for FHA mortgages (more on that in a moment) but a higher down payment (10%) is required. For borrowers with FICO scores of 580 or higher on their credit report, maximum financing is allowed with a required down payment of only 3.5%. These are simply FHA loan program minimum standards. Your lender may require higher FICO scores, and typically scores in the mid-600s tend to have a better chance to qualify for loan approval. | more...

March 2, 2017

FHA Refinance Loan Basics

By Joe Wallace

FHA refinance loans bring with them many questions, especially for first time applicants. Here’s a good example, a question asked recently in our comments section: “My husband lost his home to a short sale on his previous marriage. We are currently doing a rent to own, but we hold the deed. They fought the lender, and won, and it was supposed to be taken off of his credit report. Equifax kept it on. His score is 709. Can we refinance our home?” FHA refinance loan rules in HUD 4000.1 state, “A refinance transaction is a new Mortgage for a Borrower with legal title on the same Property with the proceeds used to pay off any existing liens.” If the reader’s circumstances (a “rent to own” arrangement, in this case) meets | more...

March 1, 2017

FHA HECM Loans: A Reader Question

By Joe Wallace

FHA refinance loans include the FHA HECM loan option for qualified borrowers. A reader asked us a question recently on HECM loans; “How does the Non-Borrowing spouse prove or show legal ownership of the property to the lender after the last surviving HECM mortgagor has died?” The reader is referring to an FHA loan rule modification that came out in 2014 about the deferral period for FHA Home Equity Conversion Mortgages that involve a surviving, non-borrowing spouse. Mortgagee Letter 2014-07 states: “In the event the last surviving mortgagor predeceases a Non-Borrowing Spouse, the due and payable status will be deferred for as long as a Non- Borrowing Spouse continues to meet all the qualifying attributes stated in the above section. In addition, such Non-Borrowing Spouse must satisfy and continue to | more...

March 1, 2017

Mortgage Rate Trends: Slightly Higher

By Joe Wallace

We’ve seen three days of improvement, followed by two days of mortgage rates creeping upward. The rate environment at the time of this writing is a bit contrary-we have seen stronger economic news and data this week that traditionally has put upward pressure on interest rates. But the most recent stronger data hasn’t put as much pressure on mortgage rates and for that we can report that number-wise, the best execution rates haven’t budged that much. Affected borrowers will likely see the difference reflected in closing costs. 30-year fixed rate conventional mortgages are holding at a best execution 4.125% at the time of this writing, which is an adjustment from the earlier range between 4.125% and 4.25% best execution. FHA mortgage rates are holding in a range between 3.75% and | more...