Articles Published in: 2017

July 11, 2017

When Is An FHA Loan Better Than A Conventional Loan?

When is an FHA loan better than a conventional loan? Many potential FHA borrowers ask this question. Do you know how FHA loans stack up against their conventional loan counterparts? Purchase And Refinance The FHA Single Family Loan program features loans for both new purchases and refinancing. If you are considering a refinance loan in your home buying strategy, an FHA mortgage may be the right move for you. If you buy FHA and refinance FHA, you can take advantage of the FHA-to-FHA only Streamline Refinance loan to get into a lower mortgage payment and/or interest rates. We’ll cover the refinancing aspect of FHA mortgage loans more closely in another blog post. FHA Loan Interest Rates FHA home loans feature interest rates that are often competitive with their conventional loan | more...

FHA Loan Approval and Late or Missed Housing Payments

July 10, 2017

When Is An FHA Loan A Good Idea? Part Two

By Joe Wallace

When is an FHA loan a good idea? There are plenty of new purchase options, but those who have existing home loans and want to refinance into lower payments or interest rates should also explore their FHA mortgage options. FHA Loans Are For Those Who Want To Refinance FHA Loans Borrowers with existing FHA mortgage loans should consider the FHA Streamline Refinance loan option. This type of FHA refi loan does not offer money back to the borrower (except for refunds of money paid up front for things that later get financed into the loan amount) but does require a benefit to the borrower in one of several forms: A lower monthly payment A lower interest rate A fixed rate (when refinancing out of an adjustable rate mortgage loan) There | more...

July 10, 2017

When Is An FHA Loan A Good Idea?

By Bruce Reichstein

When is an FHA loan a good idea? The answer depends on what you’re looking for from a home loan. Some borrowers are exactly right for an FHA mortgage, others may need another alternative. Is an FHA loan right for you? FHA Loan Occupancy Requirements Most FHA single family home loans require occupancy. The lender will ask you to certify in writing that you intend to occupy the property as your primary residence and not as a vacation home or other occasional occupancy type situation. Borrowers are free to purchase homes with up to four units and rent out the unused living units, but at least one borrower must occupy the home as her or his primary residence (usually within two months of loan closing). So if you are looking | more...

Refinancing a Second Home With An FHA Mortgage Loan

July 7, 2017

Who Qualifies For FHA Loans?

By Joe Wallace

Who qualifies for an FHA mortgage loan? There are lots of misconceptions about this-some people think FHA mortgage loans are only for first-time home buyers, others might wrongly think FHA loans are only for people who can’t afford a conventional mortgage. But the truth is much different-FHA loans require borrowers to financially qualify, but there are not restrictions on who can apply when it comes to past home ownership, “maximum income” or other factors. FHA Loans Are For First-Time Home Buyers AND Those Purchasing Homes Again That’s correct. FHA mortgage loans don’t, under the basic rules of the program itself, favor first time home buyers with different terms than those who are purchasing another home. Second, or even third-time home buyers can get the same benefits of an FHA mortgage | more...

July 6, 2017

Who Should Get An FHA Loan? Part Two

By Joe Wallace

Who should get an FHA Loan? There are many reasons why you might want to explore your FHA loan options, and not all of them involve the need to purchase a new home. FHA loans are for both house hunters and those who are looking to refinance. The options you choose will depend on your financial needs and goals. FHA Loans Are For Refinancing, Too FHA refinance loans are an excellent choice for those who want to refinance. FHA loans can refinance existing FHA mortgages, but also non-FHA loans such as VA or conventional mortgages. Refinancing into an FHA mortgage has an even bigger advantage if you are currently in a non-FHA mortgage with an adjustable rate. You can refinance into a fixed-rate FHA home loan and get the benefit | more...

July 6, 2017

Who Should Get An FHA Loan?

By Bruce Reichstein

Who should get an FHA loan? There are a variety of options with FHA mortgages, and depending on your financial goals and needs, you may find an FHA mortgage is the right choice for you, especially if you are interested in lower interest rates, and a more competitive down payment requirement. FHA Loans Are For Those Who Need A Lower Down Payment You should get an FHA mortgage loan if the idea of paying as much as 10% down doesn’t work for you. FHA mortgage loans require a minimum 3.5% down payment, which is based on the adjusted value of the property you are purchasing. It is important to know that your credit history will play an important part in determining your down payment in some cases; borrowers who have | more...

Credit Scores For An FHA Home Loan: When Low Credit Is Not Bad Credit

July 5, 2017

Who Are FHA Loans Good For? Part Two

By Joe Wallace

Who are FHA loans good for? We’re examining this issue to help clear up some myths and misconceptions about the FHA loan program including the notion that FHA loans are only intended for first-time home buyers (FHA loans are available to all financially qualified borrowers) and the idea that FHA mortgages have an income limit that prevents those with greater incomes from applying (not true). Who Are FHA Loans Good For? FHA loans are good for both first time buyers and those who have returned to house-hunting after owning property. For second-time house hunters (and beyond) the most important thing to remember is that FHA loans have an occupancy requirement and you can only purchase a primary residence with an FHA loan. No timeshares, vacation homes, or other “occasional occupancy” | more...

July 5, 2017

Who Are FHA Loans Good For?

By Bruce Reichstein

Who are FHA loans good for? It’s an excellent question and the answer might surprise you. FHA mortgages are often thought of as “helper loans” due to a misconception that FHA mortgages are specifically for first time home buyers, economically disadvantaged people, or new families. What’s the truth? FHA Loans Are Available To All Financially Qualified Applicants There is no minimum income limit OR “maximum income” cutoff for FHA home loans. A borrower cannot earn “too much money” and be disqualified as a result. FHA home loans are for anyone who meets the minimum FICO score requirements, has a reliable payment history on all financial obligations, and can show that their employment is stable and likely to continue. FHA Loans Are For All Types Of Borrowers Some mistakenly believe that | more...

July 4, 2017

Happy Independence Day!

By Joe Wallace

Today we pause from our usual schedule of writing about all things related to FHA home loans and refinance loans. We celebrate the 4th of July holiday with you today and will return tomorrow with our regular schedule of news and information about FHA mortgage loans. Have a safe and fun holiday, and thank you for reading!

July 3, 2017

What Is An FHA Cash-Out Refinance Loan? Part Two

By Joe Wallace

What is an FHA cash-out refinance loan? These types of loans are designed to help the borrower draw equity out of the property being refinanced. Once the original loan is paid off, and the new loan’s fees are covered, the remaining cash comes back to the borrower for any purpose acceptable to the lender. Cash Back, LTV Limits FHA cash-out refinance loans are different than FHA Streamline Refinance loans, which are restricted to FHA-to-FHA transactions and don’t allow any cash back except refunds. FHA cash-out refi loans are “appraisal required” and feature an LTV limit. That limit is 85% of the adjusted value of the home. There is also a mortgage limit found in the cash-out refi rules in HUD 4000.1: “The combined mortgage amount of the first Mortgage and | more...