Articles Published in: 2018

FHA Mortgage Loans: Do Interest Rates Matter?

March 13, 2018

When Should I Refinance With An FHA Mortgage?

When should I refinance with an FHA mortgage? That is a question many home owners face, especially if their financial plans have changed from the ones the borrower had when closing the original mortgage. Do you know if it is a good time to refinance? If you need lower payments or interest rates, and are credit-qualified to receive those lower rates, it may be the right time to explore your options. FHA Refinancing For Borrowers In Adjustable Rate Mortgages Some FHA borrowers buy a home with an adjustable rate loan, either thinking they will sell before the introductory rate ends (or before the rates are adjusted beyond a certain threshold) or refinance the loan at some later date. FHA ARM loan adjustments may be more conservative than some conventional loan | more...

March 12, 2018

FHA Loan Rules: How Inducement To Purchase Rules Affect Your Loan

By Joe Wallace

Do you know how FHA loan rules for inducement to purchase can affect your FHA loan transaction? We often discuss the basics about FHA home loan requirements, and especially in the area of seller rights and responsibilities, but there are other issues associated with inducements to purchase you should know about aside from the obvious issues. What kind of requirements? Many know that sellers may contribute up to six percent of the sale price of the home toward the borrower’s closing costs. But the FHA’s six percent rule (no interested party contributions above six percent of the sale price of the home without a corresponding reduction in the home loan amount) is just one factor. There are other inducements to purchase that can also result in a reduction of the | more...

March 9, 2018

FHA Loan Down Payment Rules You Should Know

By Joe Wallace

FHA loan down payment rules you should know include requirements for source funds, and what contributions by “interested parties” mean for a borrower’s minimum cash investment. FHA loan rules for down payments are found in HUD 4000.1, which has a lot to say about how much should be put down for a new purchase home loan transaction, and where that money can come from. FHA Loan Rules For Down Payments: FICO Score Requirements Did you know that your FICO score can affect how much down payment you are required to make on your mortgage loan? FHA loan rules specifically require a minimum credit score of 580 or higher to qualify for the lowest down payment of 3.5% (of the adjusted value of the home). 580 is the FHA minimum; your | more...

March 8, 2018

What Goes Into Your FHA Mortgage Payment?

By Bruce Reichstein

What goes into your FHA mortgage payment? It’s easy to assume that you’re paying principal and interest, divided by the number of months you are obligated to on the mortgage note. But is that really all that goes into your monthly mortgage bill? The short answer is no, there’s more to it than that. FHA Loan Rules For Debt-To-Income Ratios HUD 4000.1, the FHA single family home loan handbook, has instructions for the lender to help determine a borrower’s credit-worthiness. The lender doesn’t just calculate the amount of your income versus how much debt you have going out on a monthly basis-that debt ratio has to be calculated with and without the mortgage payment to see what percentage of your monthly income is taken up by debt. The formula is | more...

March 8, 2018

FHA Loans, Eligible Property Types, And Mixed-Use Properties

By Joe Wallace

There are a few misconceptions about FHA loans when it comes to eligible property types and purchasing mixed-use property. The FHA Single Family Home Loan Handbook, HUD 4000.1, has some instructions for the lender in these areas that are good to know going into the house hunting process. FHA Loans For Mixed-Use Property There are FHA mortgages available to purchase mixed-use property as long as that property meets the right FHA criteria; it must be primarily residential in nature, and non-residential use of the home must not overwhelm the property. HUD 4000.1 defines “mixed use” property as follows: “Mixed Use refers to a Property suitable for a combination of uses including any of the following: commercial, residential, retail, office or parking space. Mixed Use one- to four-unit Single Family Properties | more...

March 7, 2018

FHA Loans And Electronic Signatures: Rules You Need To Know

By Bruce Reichstein

What do you need to know about FHA loans and electronic signatures? In the 21st century, it’s easy to assume that certain aspects of digital and mobile culture are applicable to most (if not all) transactions. But in the case of FHA home loans, it’s not quite that easy. Electronic Signatures Are Not Universal The use of electronic signatures for home loan paperwork is not available from all participating FHA lenders, and FHA loan rules do not permit the use of electronic signatures in certain loan transactions. In fact, on certain types of loan paperwork, electronic signatures are never permitted, at least at the time of this writing. FHA Loan Rules Define Electronic Signatures HUD 4000.1 instructs the lender, “An electronic signature conducted in accordance with the Electronic Signature Performance | more...

Coronavirus And Home Loan Appraisals: What You Need To Know Now

March 7, 2018

Help For Spanish-Speaking HomeOwners In Federal Disaster Areas

By Joe Wallace

Homeowners in federally-declared disaster areas are still working to recover homes, property, and personal lives after the hurricanes, mudslides, fires, and other natural disasters in recent times. Efforts by the federal government including the FHA and FEMA are ongoing. Home owners-including FHA borrowers-have a range of options open to them including FHA loan foreclosure avoidance, loan forbearance, even the addition of a partial claim procedure to help FHA borrowers avoid payment shock as they resume pre-disaster FHA home loan payments. Some of these programs are well-known in the disaster areas they serve. But what might not be so well known? The fact that information about these programs is available in Spanish. The FHA/HUD official site includes information in Spanish about disaster relief options. The publication, “Información Importante Sobre Recuperación Ante | more...

March 6, 2018

What Can I Add To My FHA Mortgage Loan?

By Bruce Reichstein

What can I add to my FHA mortgage loan? There are several options for things you can add to the loan, but it’s important to remember that cash back to the borrower for new purchase home loans is not permitted except as a refund. But you are permitted to add funds to the mortgage loan to cover certain expenses you wish to finance into the home loan. What follows is information on FHA loan program rules only. Your chosen participating FHA lender may have additional requirements above and beyond what is mentioned here. FHA Loan Funds For Energy Efficient Mortgages If you are buying or refinancing a home loan with an FHA mortgage, you have the option to apply for additional loan funds that will be used for approved energy-efficient | more...

March 6, 2018

Is There A Size Requirement For FHA Loan Homes?

By Joe Wallace

Is there a size requirement for FHA loan homes? Some borrowers may have concerns about size issues, and while there are some rules on the books that affect FHA loan transactions in terms of size, not all guidelines apply to all housing types. In fact, FHA loan rules often leave certain details of the appraisal process up to the local authority; the FHA does not try to regulate every single state of the appraisal process or try to anticipate all potential issues. State and local laws play an important part in the appraisal process. FHA Loan Rules and State/Local Building Code FHA loan rules covering all aspects of the appraisal process are found in HUD 4000.1, the FHA single family loan program handbook. But these rules aren’t the only ones | more...

March 5, 2018

FHA Home Loan Resources You Should Know

By Bruce Reichstein

FHA home loan resources you should know include online mortgage calculators, pre-qualification for a home loan, and the availability of free credit reports to help you in the research and planning stages of your new home loan or refinance loan. Get Your Free Credit Reports A Year In Advance Of Your Home Loan The government consumer watchdog agency, the Consumer Financial Protection Bureau (CFPB), reminds home loan applicants that they are entitled to “a free credit report every 12 months from each of the three major consumer reporting companies (Equifax, Experian and TransUnion)” according to the CFPB official site. Pulling your credit reports a year in advance is an excellent idea as it will give you plenty of time to deal with potentially outdated or inaccurate information, contest identity theft | more...