Articles Published in: July 2019

July 16, 2019

First-Time Home Buyers And Finding A First Home

Are you looking for your first home? A Realtor.com survey reveals some interesting things about those looking for their first house, including some difficulties that affect many house hunters in today’s markets. The Realtor.com survey, conducted between March and June 2019, includes some demographic data about those exploring today’s mortgage rates and looking for suitable homes: 25 percent have been looking for a home in the past month 21 percent have been looking for 2-3 months 15 percent have been looking for 4-6 months 9 percent have been looking for 7-12 months 24 percent have been looking for more than a year And of that number, some percentages regarding problems house hunters are facing today. According to the survey, one of the main problems is locating an affordable home within | more...

July 15, 2019

FHA Home Loans And Flood Hazard Areas

By Joe Wallace

FHA home loans have rules for loan approval that include determining if a house is suitable for the mortgage. In some cases a home might not be approved for a mortgage because of its’ condition, but in others the location of the home may be a problem. This is true in cases where a home is located too near a high pressure gas pipeline, high voltage lines, or mining operations. But there is another aspect of this you should know-the FHA loan rules for homes located in certain areas prone to flooding. FHA loan rules in HUD 4000.1 state that the lender is responsible for making sure the property to be purchased with an FHA mortgage is not located in certain government-designated flood zones. From HUD 4000.1: “The Mortgagee must | more...

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

July 15, 2019

VA One-Time Close Construction Loan Tips

By Bruce Reichstein

There are plenty of VA One-Time Close (VA OTC) / Single-Close construction loan tips you should know about-probably as many as for FHA One-Time Close loan or the USDA One-Time Close equivalent. Did you know that the size of your project could affect your ability to get a no-money-down VA home loan? Or that you should discuss the amount of time your VA OTC loan might take with the seller of the land if you are purchasing land and building the home? Know these issues before you apply for best results when you are ready to commit to your VA construction loan. VA One-Time Close Construction Loans / Single-Close Construction Loans Require A Contractor VA loan rules for construction loans require the borrower to hire an outside contractor rather than | more...

July 12, 2019

The Difference Between Homeowner’s Insurance And Mortgage Insurance

By Bruce Reichstein

The journey toward home ownership costs money; you need to save for your down payment, closing costs, inspection fees, and mortgage insurance. But there is an expense you should also know about that protects you from fires, theft, and other property damage-the homeowner’s insurance policy. What is the difference between mortgage insurance and homeowner’s insurance? Borrowers need to know the nuances and be fully prepared to become a homeowner by understanding what protects YOU and what protects the LENDER. FHA Mortgage Insurance Protects The Lender FHA mortgage insurance premiums are paid as part of your monthly mortgage payment. You are required to pay an Up-Front Mortgage Insurance Premium (UFMIP) and a monthly mortgage insurance premium. These payments are designed to protect the lender in case the borrower defaults on the | more...

July 11, 2019

HUD Charges Maine Apartment Owners With Fair Housing Act Violations

By Bruce Reichstein

Violations of the Fair Housing Act can seriously compromise a house hunter’s ability to find and keep housing. Even discrimination at the rental level can affect the ability to buy a home-how is someone supposed to rent an apartment in the meantime while dealing with discrimination? We report on these issues to raise awareness of how Fair Housing Act laws make house hunting more accessible and how violations of these laws hinder the consumer. In a recent example, the U.S. Department of Housing and Urban Development has announced charges against Roderick Apartments in Clinton, Maine for alleged violations of the Fair Housing Act. These charges are associated with a complaint that the apartment owners denied a veteran with disabilities to keep an assistance animal on the property. Fair Housing Act | more...

July 10, 2019

FHA Home Loan Down Payment Assistance

By Joe Wallace

The down payment is one of the daunting things for first-time home buyers-coming up with the cash to put the minimum required 3.5% (of the adjusted value of the home) may seem like an uphill task, but fortunately the FHA loan program guidelines permit the use of approved down payment assistance programs. These programs are not offered by the Department of Housing and Urban Development; potential borrowers will need to seek out these down payment assistance programs in their local area. The rules the FHA provides to organizations wishing to offer down payment assistance includes the requirement that down payment gifts or grants must not come with an expectation of repayment. They also include the requirement that such funds be properly sourced and transferred to the borrower. But FHA rules | more...

July 9, 2019

Can I Do An FHA Cash-Out Refinance On A Rental Property?

By Bruce Reichstein

When you buy a home with a mortgage loan, you generally have the option later down the line to apply for cash-out refinancing on that home. It doesn’t matter if you have a conventional mortgage, VA loan, or an FHA home loan, cash-out refinance options are available once you have made a minimum amount of mortgage loan payments (not ideal) and the cash-out options only get better the longer you pay on the original mortgage. Why is cash-out refinancing not such a great deal in the earliest days of your mortgage? Partially because you haven’t paid down the loan enough and/or waited for your property values to increase long enough in the right circumstances to get much value out of the property. Generally speaking, the longer you pay on the | more...

July 8, 2019

Myths About Home Loans and Credit

By Joe Wallace

There are lots of myths about home loans and the credit requirements you need to be approved for a mortgage. Here are some pervasive myths about credit as it relates to the home loan application you may be considering in the near future. Credit Myths: You Need Perfect Credit To Get A Mortgage FHA mortgage loan credit standards are more forgiving than some conventional options and borrowers do not need to have a perfect record to qualify. What you DO need is 12 months or more of on-time payments with no late or missed payments, a history of responsible credit use with balances that are not close to the credit limit, and a solid employment history (two years or more). Home Loan Credit Myths: The Lender Only Pulls Your Credit | more...

Conventional Loan Interest Rates Make History, FHA Loan Rates Still Incredibly Low

July 8, 2019

The Difference Between FHA Loan Credit Score Requirements And Your Lender’s FICO Score Rules

By Joe Wallace

We answer many reader questions about FHA home loans, including information about credit requirements, appraisal issues, and FHA loan standards. Among the most common reader questions about FHA home loans? Questions about the credit scores required to get home loan approval. This issue is confusing to some borrowers because they don’t realize that FHA loan rules say one thing and lender requirements may say another. Is this a contradiction? No. The FHA loan credit score requirements should be viewed by the borrower as the minimum standard, with the knowledge that the lender is permitted to require higher FICO scores than the FHA’s minimums but NOT permitted to require LOWER scores than the FHA minimum. In other words, consider the FHA loan FICO score numbers as the baseline lowest scores permitted. | more...

July 5, 2019

What You Need To Know When Your Home Loan Lender Pulls Your Credit Report

By Joe Wallace

Everyone who applies for a home loan should know the contents of their credit reports long before they start filling out FHA loan application paperwork. Just as important? Knowing what your loan officer is looking for out of your credit report. Did you know that FHA home loan rules published in HUD 4000.1 instruct the lender on specific areas of the report to examine? In fact, there are FHA loan standards for the credit report itself-the report must meet the following requirements in order to be used by the lender. The credit report must contain: the name of the FHA lender ordering the credit report; the name, address, and telephone number of the consumer reporting agency; the name and SSN of each Borrower; and the primary repository from which any | more...