Articles Published in: August 2017

Getting An FHA Mortgage After Bankruptcy

August 16, 2017

Is My Credit Good Enough For An FHA Home Loan?

Is my credit good enough for an FHA home loan? Borrowers need to know what FHA loan minimum credit standards are, but they will also need to find out what their participating lender’s credit requirements are above and beyond FHA loan minimums. FHA Minimum Standards For FICO Scores The FHA loan handbook, HUD 4000.1, lists the criteria the FHA requires to qualify for a home loan. For most FHA mortgage loans, borrowers who have FICO scores of 580 or higher qualify for maximum financing with the lowest down payment possible (3.5% of the adjusted value of the home or the purchase price, whichever is lower). Borrowers with FICO scores between 500 and 579 may technically qualify for an FHA mortgage, but with a minimum 10% down. Borrowers with FICO scores | more...

August 15, 2017

Can I Get A Second FHA Appraisal?

By Joe Wallace

Can I get a second FHA appraisal? There are a few reasons why a borrow might feel motivated to ask that question, but in many cases it could be due to a disagreement about the outcome of the original FHA appraisal. Ordering A Second FHA Appraisal FHA loan rules in HUD 4000.1, the FHA single-family home loan handbook, clearly state the FHA’s position on ordering second appraisals due to a dispute over the outcome. “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.” That is simple enough. However, there may be situations where one party to the loan feels that the appraisal was not done competently or that the appraisal is | more...

August 15, 2017

What Should I Know About FHA Appraisals?

By Bruce Reichstein

What should I know about FHA appraisals? There are many factors to remember about the FHA appraisal process, and not all of them have to do with the act of doing the appraisal; borrowers need to know how the appraisal fits into the overall process of applying for an FHA loan and getting loan approval. FHA Appraisals Are A Typical Expense The appraisal fee is a standard part of a home loan’s fees and expenses, and borrowers should save money for both the appraisal and the possibility of additional fees that could be required depending on the outcome (more on that issue below). Borrowers should keep in mind that the home loan cannot be approved without the results of the appraisal, so it’s best to come to the loan process | more...

Get A Free Credit Report Before Applying For An FHA Loan

August 14, 2017

Where Can I Get An FHA Loan?

By Bruce Reichstein

Where can I get an FHA loan? There are plenty of options when you are ready to begin your journey to become a home owner-you can apply in person, or get pre-qualified or apply online. How does it all work? Who Offers FHA Home Loans? FHA mortgages are offered by participating lenders who have been approved by the FHA to offer FHA mortgages, refinance loans, FHA Reverse Mortgages, and rehab loans. The FHA itself does not loan the money for you to purchase your home. The FHA may require the lender, depending on circumstances, to work with the FHA to approve certain home loans, but many FHA lenders have earned the right to offer loans “unsupervised”, meaning they have met standards that permit them to make decisions on loan approval | more...

August 11, 2017

FHA Mortgage Questions: What Is Undisclosed Debt?

By Joe Wallace

What is undisclosed debt and how can it affect your FHA home loan application? Undisclosed debt is basically credit information that is either not listed by the borrower on the credit application, or debt that does not show up yet on a credit report. There are several reasons why a lender would be concerned by undisclosed debt and FHA loan rules anticipate situations where such problems occur. Undisclosed Non-Mortgage Debt FHA loan rules for this type of debt which is not volunteered by the borrower on a mortgage application (or does not show up on the borrower’s credit report) are found on page 187 of the FHA loan handbook, HUD 4000.1. There we find these instructions to the lender: “When a debt or obligation (other than a Mortgage) not listed | more...

August 10, 2017

FHA 203(k) Fixer-Upper Loans: What About The Appraisal?

By Bruce Reichstein

When you buy a home with an FHA mortgage, it must be appraised to insure the property meets minimum FHA standards. A home to be purchased with an FHA mortgage must be code-compliant, it must not be too close to high voltage lines or high pressure gas pipelines, and there are specific requirements for property located near know natural disaster zones. All of these requirements protect buyers and lenders alike, but there are certain instances where a property would never pass the FHA appraisal, yet borrowers seek mortgage loans for these properties anyway. Consider the borrower who needs a home loan to do rehab or repair work on an existing structure that badly needs it. And what about the borrower who wants to purchase a fixer-upper home, or a property | more...

August 10, 2017

What Is An FHA Appraisal?

By Joe Wallace

What is an FHA appraisal? It’s one of the most important parts of your home loan process when purchasing property with an FHA mortgage. The appraisal is a mandatory review of the property to help the lender establish the fair market value of the home while making sure the property meets minimum FHA requirements. But there’s more to the appraisal, as we’ll learn. The FHA Appraisal Is A Tool For Your Loan Officer Appraisals are not intended to help or inform the buyer as to the condition of the property. Some mistake the FHA appraisal for a home inspection, assuming that the FHA will “approve” or “reject” a home based on its’ condition. The appraisal process is NOT a home inspection. Borrowers who choose not to pay for a home | more...

August 9, 2017

What Can I Add To My FHA Mortgage Loan?

By Bruce Reichstein

What can I add to my FHA mortgage loan? There’s a list of items that may be allowed to be added to your mortgage loan above and beyond the adjusted value of your property. Let’s examine what the FHA loan handbook, HUD 4000.1, has to say about adding certain costs to your home loan amount. Calculating The Maximum Mortgage Amount On Your FHA Loan To start, let’s see what HUD 4000.1 says about how the lender is expected to calculate the maximum mortgage amount. “The maximum mortgage amount that FHA will insure on a specific purchase is calculated by multiplying the appropriate LTV percentage by the Adjusted Value. In order for FHA to insure this maximum mortgage amount, the Borrower must make a Minimum Required Investment (MRI) of at least | more...

August 9, 2017

How Much Can I Borrow With An FHA Refinance Loan?

By Joe Wallace

How much can I borrow with an FHA refinance loan? There are many reasons why a borrower might need to know early in the planning stages how much might be allowed, and knowing the FHA loan rules in this area can definitely help save time before you apply for the loan. Knowing what kind of refinance loan you might need is a big help in answering the question. Why? Because the actual dollar amount for some FHA refi loans may vary for the same property depending on circumstances. The amount of an FHA rehab loan, for example, will be higher since there are laborers and materials to be paid for, inspections, etc. The same home that gets an FHA Streamline Refinance loan instead might have a lower dollar amount depending | more...

August 8, 2017

How Soon Can I Sell My Home? FHA Loan Rules Part Two

By Bruce Reichstein

How soon can I sell my home? In our previous blog post on this subject, we examined the FHA loan handbook, HUD 4000.1, and what it has to say about how quickly you can sell a property purchased with an FHA mortgage once the loan has closed. In general, FHA loan rules don’t have much to say about what the owner of record does with the property (with regard to selling it) once it has been purchased and occupied as per FHA loan requirements. The spirit of the FHA loan rules seems to be that the owner should be free to sell without restriction. But FHA loan rules do have something to say about buying a home shortly after it has been purchased from another. There are restrictions on “flipping”, | more...