Articles Published in: April 2018

If Your Home Was Damaged In A Federally Declared Disaster Area

April 30, 2018

FHA Loans That Allow Home Improvements, Renovations, and One-Time Close Construction

In addition to new purchase home loans and refinance loans, a borrower’s options for a mortgage also include loans that allow money for home improvements, renovations, and even construction. Know your FHA loan options before you choose a type of property or the kind of loan you seek. There are many ways to get additional funds to fix, rehab, or even build a home from the ground up. FHA New Purchase Home Loans There is an option with most FHA mortgages including new purchase loans that allows added funds for the purpose of buying and installing energy-efficient upgrades to the home. No matter what type of FHA mortgage you want, ask the lender about the FHA Energy Efficient Mortgage option which allows up to $6,000 or more depending on the | more...

April 27, 2018

One-Time Close Construction Loans For First Time Home Buyers

By Joe Wallace

Are construction loans available for first-time home buyers? Some may feel daunted at the idea of having a house built for them from the ground up, but the reality is that some house hunters would rather have a home built just for them rather than buying one with a previous owner. What options are available to first time home buyers who want a construction loan? The first thing to remember is that being a first time buyer does not count against you when looking into your construction loan options. What you should be more concerned with is the nature of the loan itself. Some construction loans feature two applications and two closing dates, but One-Time Close construction loans / Single-Close construction loans offered by the VA, USDA, and FHA allow | more...

April 27, 2018

The One-Time Close Construction Loan: VA, FHA, And USDA Options

By Bruce Reichstein

There are two general types of construction loan. One construction loan has two applications and two closing dates, requiring a new credit check for each phase of the loan-the construction itself and the mortgage. Another type, the One-Time Close / Single-Close construction loan, has only one application and closing date, protecting the borrower from potential complications associated with a second loan application. There is an FHA One-Time Close loan, but also a VA OTC version of the program and a USDA OTC option available for those in qualifying rural areas. What do these loans have in common with each other? FHA One-Time Close / Single-Close Construction Loans Versus VA One-Time Close Loans The FHA and VA One-Time Close / Single-Close loan programs are quite similar. Both require builders on a | more...

April 26, 2018

FHA Loan Approval Rules: Work History

By Bruce Reichstein

Whether you seek an FHA One Time Close construction loan or want to buy an existing-construction home, the FHA guidelines for loan approval require your lender to verify your employment and income history. How much time will the lender require you to be on the job in order to get your mortgage loan approved? That standard will vary from lender to lender, so you will need to discuss work history requirements with your loan officer. However, at a minimum, FHA loan rules require the lender to verify two years of work history. That work history does not have to be with the same company. FHA Loan Rules For Income Verification Along with your recent work history, the lender is also required to verify the income you report to the lender | more...

April 25, 2018

FHA Home Loan Closing Costs You Should Anticipate

By Joe Wallace

FHA home loans have closing costs a borrower should plan to save and pay for. No matter if you need an FHA Home Equity Conversion Mortgage, a 203(k) rehab loan, or an FHA One Time Close construction loan, there will be closing costs to pay for. No borrower should plan for a home loan without anticipating the closing costs. You should budget and save for these expenses as early as possible-once you know you are interested in purchasing a home, you should prepare for these costs. HUD 4000.1 tells the lender that FHA loan rules permit closing costs; the lender “may charge and collect from Borrowers those customary and reasonable closing costs necessary to close the Mortgage. Charges may not exceed the actual costs.” This is not a complete or | more...

April 25, 2018

FHA Home Loans: Facts You Should Know Before You Buy

By Bruce Reichstein

FHA loan facts you should know before you buy include a variety of concerns, one of which is an optional issue some borrowers choose not to address until it is too late. Don’t make the same mistakes as some first time home buyers-the money you save could be significant. Never Buy A Home Without A Home Inspection It’s important to point out that the headline for this section does NOT read “Never buy a home without an appraisal”. FHA appraisals are a mandatory part of the home loan process, but inspections are on the borrower to arrange, pay for, and review. Home inspections are the only way a borrower can make a truly informed purchase. Those who rely on the appraisal alone for any new purchase mortgage do so at | more...

April 24, 2018

Low-Down Payment FHA Home Loans

By Joe Wallace

Compared to some non-FHA mortgages, FHA home loans feature low down payments-as little as 3.5% of the adjusted value of the property for financially qualified borrowers. FICO scores and other credit data will play an important part in the required down payment-if your FICO score is too low the lender may require 10% down (lender standards will vary), but financially qualified borrowers should expect 3.5% down and budget for the down payment accordingly. One type of FHA home loan may not require any down payment at all, depending on circumstances, as we’ll read below. FHA Loan Down Payment Requirements: FHA Loan Assumptions FHA loan assumption rules permit the home owner to allow another person to assume the mortgage loan-the house and the debt are signed over to someone else, with | more...

April 23, 2018

FHA Home Loan Options: Build, Buy, Or Rehab

By Joe Wallace

Build, buy, or rehab? Those are among the options open to FHA home loan applicants. Do you know what is possible with an FHA mortgage loan? The options range from purchasing an existing 1-4 unit home to having a single-family house built from scratch using an FHA One Time Close construction loan. FHA Home Loans: The “Forward Mortgage” “Forward mortgage” is a fancy way of describing the new purchase loan-an FHA mortgage that will help you buy a home. “Forward mortgages” are described as such to distinguish them from Home Equity Conversion Mortgages (HECM) or as they often called, Reverse Mortgages. A forward mortgage can include purchase of land and funds for a construction phase when an FHA One Time Close loan is being used to build to suit. FHA | more...

the importance of credit for home loan approval

April 20, 2018

FHA Refinance Home Loans: Getting Ready

By Bruce Reichstein

Do you know what you need to get ready for an FHA refinance home loan application? There are several areas you can prepare in before it’s time to sign the loan application paperwork. Check Your Credit Reports-EARLY FHA refinance loans should be treated in the same way your original home loan application was handled in terms of checking credit, avoiding new lines of credit before and during the refinance loan process, and trying to lower your debt ratio before the application. Decide The Right Refi Loan For You Your preparations for the new loan may depend greatly on the type of FHA refinance loan you are looking for; cash-out, no cash out, Streamline Refinancing, rehab refi loan, etc. How are these loans different? There are too many aspects to discuss | more...

April 19, 2018

FHA Loan Down Payment Sources: Retirement Funds

By Joe Wallace

We’ve been discussing FHA home loan down payment sources and the rules that govern them. FHA mortgage loan rules in HUD 4000.1 have strict requirements when it comes to the sourcing of down payments; since most FHA forward mortgages require a down payment, the rules in this area are very important to know ahead of your loan application. FHA Loan Down Payment Source Rules: Retirement Funds FHA loan rules permit the borrower to use retirement funds as a source of down payment money. According to HUD 4000.1: “The Mortgagee may include up to 60 percent of the value of assets, less any existing loans, from the Borrower’s retirement accounts, such as IRAs, thrift savings plans, 401(k) plan, and Keogh accounts, unless the Borrower provides conclusive evidence that a higher percentage | more...