Articles Published in: August 2018

August 17, 2018

Am I Eligible For An FHA Mortgage After Foreclosure?

“Am I eligible for an FHA loan after a foreclosure?” That is a more common question than some realize, and FHA loan rules in HUD 4000.1 address this question directly. The answer depends greatly on circumstances, how much time has passed since the foreclosure action, and how the borrower has worked to re-establish good credit. FHA Home Loan Rules On Foreclosures HUD 4000.1 contains the FHA loan rules that govern loan approval when the borrower has a foreclosure on their credit history. Much depends on how much time has elapsed since the foreclosure; HUD 4000.1 instructs the lender: “A Borrower is generally not eligible for a new FHA-insured Mortgage if the Borrower had a foreclosure or a Deed-in-Lieu (DIL) of foreclosure in the three-year period prior to the date of | more...

August 17, 2018

FHA Loans After Chapter 13 Bankruptcy

By Bruce Reichstein

FHA home loans are more forgiving where a borrower’s credit is concerned; while participating lender standards are also an important part of the loan approval process, the FHA loan program rules in HUD 4000.1 allow borrowers with lower credit scores and past credit issues a chance at loan approval. This is even true in the case of Chapter 13 bankruptcy. Some assume that filing for bankruptcy means that a new home loan is quite out of reach, but FHA loan rules say otherwise. Chapter 13 bankruptcy is described by some as a “wage earner’s plan” for repayment of debts to creditors. Installment payments may be made over a period of years. This type of bankruptcy may feature a cap on the amount of debt that can be addressed under the | more...

August 16, 2018

FHA Loans And Bankruptcy: Chapter 7

By Joe Wallace

Getting an FHA home loan following a Chapter 7 bankruptcy is not impossible; borrowers who handle their finances and credit responsibly after filing bankruptcy will find FHA home loan rules are more favorable to them than it may seem. Some assume that bankruptcy means never being able to own a home again or that it may take seven to ten years to recover from such a circumstance. FHA loan rules say otherwise, and while additional lender standards may apply the borrower does not necessarily have to wait such a long time to be considered for a new home loan. FHA Loan Requirements For Applying For A Mortgage After Chapter 7 Bankruptcy FHA loan rules in HUD 4000.1 state clearly that a Chapter 7 bankruptcy is not a barrier to a | more...

August 16, 2018

Getting An FHA Mortgage After Bankruptcy

By Bruce Reichstein

Getting an FHA home loan after filing for bankruptcy is not impossible, but it’s very important to understand the rules and requirements of FHA mortgages in this area. Do you know what it takes to be approved for an FHA single family home loan after a Chapter Seven or Chapter 13 bankruptcy? FHA Home Loans Are Possible After Bankruptcy The first thing to understand about getting an FHA home loan following a bankruptcy is that two basic factors will affect your ability to be approved. These are NOT the only factors to consider, but they are the initial requirements; all other issues likely will fall behind these two areas. The first is how much time has passed since your bankruptcy was discharged. FHA home loans require a minimum amount of | more...

August 15, 2018

FHA Home Loans And The Accuracy Of Your Credit Reports

By Joe Wallace

When you start planning for your FHA home loan and reviewing your credit reports, it’s entirely possible that you could find erroneous information in your reports. Sometimes the credit information for another person with a similar name could wind up accidentally being posted in your report, other times there may be inaccurate data in your credit history about the amount, frequency, or age of your credit account payments. How should a potential FHA borrower deal with these issues? HUD 4000.1 addresses some aspects of this issue, but not all the credit problems a borrower could experience when reviewing a credit report are covered by HUD and FHA home loan rules. HUD 4000.1, the FHA loan handbook, instructs the lender on how to proceed if the lender finds inaccuracy in debt | more...

Refinancing a Second Home With An FHA Mortgage Loan

August 14, 2018

What Can I Do With An FHA Home Loan?

By Bruce Reichstein

What can I do with an FHA home loan? This is a question on the minds of many, especially first-time home buyers who are not sure what is possible with an FHA loan and what is not. Can I Get A No-Money Down FHA Mortgage? The short answer is no-the FHA does not offer a no money down home loan. However, FHA mortgages do permit a relative, employer, or others not directly involved in the transaction to provide gift funds for the down payment which can reduce the borrower’s out-of-pocket expenses. The seller of the home cannot contribute to the down payment, but is permitted to contribute up to a certain limit to help cover closing costs. This is not part of the borrower’s required minimum down payment of 3.5% | more...

August 13, 2018

Who Needs Credit Repair Before Applying For An FHA Mortgage?

By Joe Wallace

Who needs credit repair before applying for an FHA mortgage? If you are worried about your ability to qualify for a home loan because of past financial issues, credit mistakes, or even identity theft, it’s important to begin reviewing your credit and working on raising your credit scores as early as possible before committing to a mortgage loan application. Don’t wait to start working on your credit, begin today! What Kind Of Credit Repair Is Needed? There are many different things you can do to work on your credit rating and credit history but what we NOT suggesting is that you pay a third party offering to “remove all negative credit information” from your credit report or other things that are not actually possible. The best way to begin working | more...

August 13, 2018

FHA Mortgages: When Is Cash Back Allowed?

By Bruce Reichstein

When is cash back to the borrower permitted with an FHA home loan? Some borrowers have the idea that they will apply for a mortgage loan that has a higher amount than the money required to purchase the home and pay for any fees that are allowed to be included in the loan amount. But is this possible? FHA mortgage loan rules that govern cash back to the borrower are found in HUD 4000.1, which says that in most cases cash back to the borrower in this manner is not possible where new purchase, “forward” mortgages are concerned. Money Back Rules For FHA Forward Mortgages A forward mortgage, or FHA purchase loan, can only be for appraised value or the asking price (whichever is lower) and any costs included in | more...

August 10, 2018

FHA Home Loans And Interest Rates: Explore Your Options

By Joe Wallace

Concerned about reports of home loan interest rates going up and wondering how to explore your options? There are many ways an FHA home loan can help you in your search for the right home; exploring all your options among several lenders is a great way to start researching and planning for your new mortgage. FHA Home Loan Interest Rates May Be Lower Than Conventional Rates For The Same Kind Of Mortgage The key to understanding your options when it comes to mortgage loan interest rates is knowing that your credit scores and other financial qualifications may affect the rate a lender offers you. Knowing that ahead of time can help you make smarter choices when shopping around for a lender. To start, compare conventional terms and requirements with the | more...

August 9, 2018

When Should I Refinance My Home Loan?

By Bruce Reichstein

When should I refinance my home loan? That is an important question for borrowers who realize they want to cash in on rising property values, commit to home improvements, or get into a lower monthly mortgage payment. FHA refinance loans can help. FHA Refinance Loans For Conventional And Other Non-FHA Mortgages Did you know you can refinance into an FHA mortgage from a non-FHA home loan? Compare interest rates on your existing mortgage to those offered for FHA refi loans to see if it’s to your benefit to refinance. Are you in a conventional adjustable rate mortgage and want to get into an FHA fixed-rate loan? This is an option, too. Fixed rate mortgages are an excellent choice if you decide to remain in the home long-term and want to | more...