Articles Published in: 2018

FHA One Time Close Construction Loan Option

May 4, 2018

FHA One-Time Close Construction Loans: Location Matters

Location matters when you are applying for an FHA One-Time Close / Single-Close construction loan. These mortgages are for borrowers who don’t want to purchase an existing property but want a home built for them from the ground up, but FHA One-Time Close construction loans, (FHA OTC) do have some restrictions on where a home can be constructed. These restrictions aren’t as difficult to understand as you might think; FHA loan officers are required to insure the home as an economic and functional life that will last the duration of the mortgage. Part of that due diligence is making sure the home is capable of withstanding environmental conditions and/or not being put directly in harm’s way due to know problems. That’s one reason why the FHA loan rules for home | more...

May 3, 2018

FHA Mortgage Credit Issues

By Joe Wallace

FHA mortgage loans require a credit check, but many future FHA borrowers have some kind of credit issue in their past. Some things aren’t enough to derail an FHA home loan application-old credit issues that have since been resolved, disputed accounts that have since been successfully resolved or have had a payment plan created, etc. What do borrowers need to know about credit issues that CAN negatively affect the ability to borrow? For starters, it’s important to know that the most recent 12 months of your credit activity will be very important. It’s crucial to avoid late and missed payments at all costs in those 12 months for best results. Other FHA loan credit issues can affect your loan (or not) depending on the timing, severity, and nature of the | more...

May 1, 2018

Why Do People Refinance Home Loans?

By Bruce Reichstein

Why do people refinance home loans? The answers are diverse since there is more than one reason to refinance AND more than one application for an FHA refi loan. Refinancing To Get Lower Monthly Payments One powerful motivation to refinance is to get a lower mortgage payment each month. Existing FHA mortgages can be refinanced into FHA Streamline Refinancing mortgages, which feature no FHA-required new credit check or appraisal. Your lender may require a credit check and/or appraisal if lender requirements or circumstances warrant. Some Streamline Refinance loans have to include a new credit check if the borrower chooses add-ons to the loan that increase monthly payments over a certain threshold. FHA Streamline Refinance loans must generally result in a tangible benefit to the borrower including a lower payment. Non-FHA | more...

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

By Bruce Reichstein

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...