Articles Published in: 2017

May 26, 2017

Qualifying For An FHA Cash-Out Refinance Loan

Qualifying for an FHA cash-out refinance loan is much the same as qualifying for an FHA “forward mortgage” or typical new purchase loan. Since this type of refinancing involves money back to the borrower, the lender is required to run a new credit check and the usual credit requirements will apply even for those who are repeat customers for a particular lender. Credit Activity When you are preparing for your FHA cash out refinance loan, you’ll need to observe the same rules about credit that you did when you applied for your original mortgage. That means avoiding new credit card applications and other types of credit leading up to your refi loan paperwork. Why? Every time you apply for new credit, a “hard inquiry” is listed on your credit report. | more...

May 25, 2017

FHA Refinance Loan Basics You Should Know

By Bruce Reichstein

If you have an existing home loan, you may be qualified to apply to refinance that loan with an FHA mortgage. This option can help you get cash out based on the value of your home, or it can help you get into lower mortgage payments depending on the type of loan you are eligible for. Which FHA refinance loan is right for you? FHA Cash-Out Refinancing Cash-out loans are for qualified borrowers with FHA or non-FHA mortgages. Cash out refinancing allows borrowers to get cash back when there is money left over after paying off the original mortgage, plus any applicable fees. Cash-out refinance loans guaranteed by the FHA require both a new credit check and appraisal. The new appraisal is required in order to determine the current market | more...

May 24, 2017

FHA Home Loans: What You Need To Qualify

By Joe Wallace

Qualifying for an FHA mortgage is a lot like qualifying for any other major line of credit. FHA home loans are open to all financially qualified borrowers; no applicant is turned away by an FHA lender for “earning too much” and no applicant is denied the chance to apply because they don’t fit into a specific category of wage earner. The amount of income you earn only matters as related to your ability to afford the loan. The FHA loan program is not aimed specifically at one type of income group or another. Credit Qualifying For An FHA Loan Qualifying for an FHA loan means having a FICO score acceptable to both the FHA and your lender. FHA FICO score standards start at 580 and above for maximum financing (minus | more...

How much can I borrow with an FHA refinance loan?

May 23, 2017

Basics Of An FHA Home Loan

By Bruce Reichstein

Are you interested in an FHA mortgage? If you’ve never applied for an FHA home loan before, there are some basics you should know that will help you make the right choices for the property you wish to purchase. Who Is An FHA Home Loan For? The FHA single-family home loan program is available to all financially qualified borrowers looking to buy property that meets FHA standards. FHA loans are for owner-occupiers looking to purchase a home to live in as their primary residence. There is a residency requirement for FHA mortgages, and FHA single family home loans are not intended for investment properties. You can purchase a home with as many as four units, and the borrower is free to rent out the unused units of the property as | more...

May 22, 2017

Getting Ready For An FHA Mortgage Loan

By Bruce Reichstein

Getting ready for an FHA mortgage loan doesn’t just mean checking your credit report and FICO scores, saving up money for a down payment, and reducing your debt-to-income ratio. It also means making important choices about your home and mortgage needs. Some of these choices may need to be made early in the preparation stage, others may come later depending on the type of home you decide to buy. Are you ready for an FHA mortgage loan? Type Of Home Believe it or not, the nature of the property you buy with your FHA mortgage loan could affect the type of home loan you apply for. A typical suburban home isn’t the same as a mobile home or a condo. The loans for a condo or manufactured home have different | more...

May 22, 2017

Mortgage Rate Trends: Pushing Higher

By Joe Wallace

Since our last report, mortgage rate trends have been in the “higher” category. That’s due at least in part, according to our sources, to local political drama which has sent investors moving for safer havens. Those moves often reflect badly on rates, and those hoping for a chance to squeeze more recovery out of current trends likely weren’t counting on breaking news about possible impeachment proceedings over FBI director James Comey and questions of Russian involvement in U.S. politics to influence mortgage rates. But they have, however indirectly. At the time of this writing, 30-year fixed rate conventional mortgage rate numbers have taken an upward turn to 4.0%, best execution. That’s out of a previous range of rates, with 4.0% being the bottom end of the range. FHA mortgage loan | more...

May 19, 2017

An FHA Mortgage Post-Bankruptcy?

By Joe Wallace

Is a mortgage loan possible after bankruptcy? When it comes to FHA home loans the answer is yes, as long as the borrower meets FHA loan standards and sits out a mandatory waiting period (which may vary depending on the bankruptcy, state law, and lender standards). One reader asked a question this week about bankruptcy and FHA loans: “My credit rating is 677 as of 5/18/2017. My income is established by a job that Ive held for over 15 years. My bankruptcy was completed in July of 2011. Can I qualify for an FHA mortgage?” There are many issues at work in situations like these including whether or not the borrower has established a satisfactory pattern of credit activity following the bankruptcy action. The mandatory waiting period (under FHA standards, | more...

May 18, 2017

FHA Appraisal Problems: A Reader Question

By Bruce Reichstein

We’ve gotten a variety of questions in our comments section this week about issues connected to the FHA appraisal process. Here’s the latest: “I have an FHA loan. It started raining on the day of the appraisal and we noticed a leak in the basement. The sellers agreed to fix the drainage issue that was causing it. During the walk-through we noticed that instead of busting out concrete and installing drainage pipes that they patched it up with more concrete. As ugly as it was I was okay with it as long as it kept the basement dry.” “Fast Forward to the first rainy day after closing on the home and I have an all out flood in my basement! My realtor said that there is nothing that can be | more...

Can I buy a manufactured home with an FHA loan?

May 18, 2017

FHA Loan Questions: Credit Score

By Joe Wallace

Do FHA loan rules require more than one credit score for a borrower to qualify for a mortgage loan? That’s what one reader wants to know this week: “Can you tell me if FHA can lend if someone only has one score? It’s a 621 score. This home buyer had a short sale four years ago and did not rebuild credit as she decided not to get any credit cards. She has a debit card and that is it. Please advise if one score would be accepted?” FHA loan rules for credit score requirements are found in HUD 4000.1, the FHA single-family home loan rule book. HUD 4000.1 has instructions to the lender for credit score requirements which include the following about what is called the Minimum Decision Credit Score: | more...

May 17, 2017

FHA Loan Appraisal Questions: Well Water Guidelines

By Joe Wallace

A reader asked us an FHA loan appraisal question this week about a recent post we did on water quality issues. “We have been requiring a safe water test to verify the water standards are meet per the guidelines but we now have an Loan Officer arguing that it is not required unless the appraiser notes an issue. Is a water test really not required have I been reading the guidelines wrong since 2015?” The “we” in this case would seem to be a participating FHA lender. Is the loan officer mentioned in the question correct? We turned to the relevant passages in HUD 4000.1 to reaffirm what the FHA loan rule book says about water quality. “The Mortgagee must confirm that a connection is made to a public or | more...