Articles Published in: December 2019

December 16, 2019

What You Need To Get Ready For A Home Loan Application

What do you need to get ready for a home loan application? Some things are practical and common-sense moves such as deciding in advance what kind of property you want to buy, while others are more about aesthetics such as the kind of neighborhood you want to live in, choosing urban or rural areas, etc. Why take this extra time? For a start, knowing what kind of property you want can require some serious thinking. The range of styles available alone may seem intimidating to some. In 2019, some of the most popular and most widely-searched for home styles included Farmhouse style, Colonial house style, Cape Cod house style, Spanish style house, and Art Deco style. Starting early can help you weed out the ones you might like versus those | more...

December 13, 2019

5 FHA Loan Facts To Remember When House Hunting

By Bruce Reichstein

There are five basic things to remember when house hunting that can help you make better choices about your loan and the home you want to purchase with it. FHA mortgages are for those who intend to own and occupy the home as their primary residence, so if you are looking to find a home to live in, keep reading! FHA Home Loans Are Available For Fixer-Uppers If you want to buy a home you are sure won’t pass an FHA appraisal, you can still buy the property using an FHA 203(k) Rehabilitation Loan instead of the FHA 203(b) loan used to buy homes that can pass the appraisal process. FHA 203(k) Rehab loans come in two sizes, one known as the Limited 203(k) for smaller projects that don’t involve | more...

December 12, 2019

5 Home Loan Interest Rate Facts You Should Know

By Joe Wallace

The Federal Reserve announced interest rates would not change; the week of December 9 was one investors would pay a great deal of attention to. The interest rate was left untouched on December 11, 2019; there were three adjustments in 2019. FHA Home Loan Interest Rate Facts: The Fed Does Not Directly Set Mortgage Loan Rates The interest rate cut by the Fed this week did not directly adjust mortgage loan rates, but investor reaction to the announcement definitely plays a part in the daily ebb and flow of rates. But what the Fed has done in 2019 does not “fix” home loan rates at their current low levels. What rules the daily rate changes is investor activity based on current events, economic data, and things like the Fed rate | more...

Build on your own lot. Construction loan basics

December 11, 2019

Build On Your Own Lot: Construction Loan Facts

By Bruce Reichstein

If you are interested in building a home on your own lot instead of buying a house owned by someone else, the One-Time Close construction loan is an option worth considering. Facts about One-Time Close mortgages include your options–there are FHA, VA and USDA versions of the One-Time Close Construction (OTC) loan. With a VA OTC, there is an option to put 0% down, FHA construction loans feature a low down payment of 3.5% of the adjusted price of the home in most cases. Construction loans require you to work with an approved contractor so you should plan on spending some time searching for one. Construction loans are sometimes hard to come by because borrowers don’t know the right loan to ask for, or are working with a lender who | more...

December 10, 2019

Higher FHA Home Loan Limits For 2020

By Bruce Reichstein

In 2019, the FHA and HUD announced higher loan limits, giving borrowers in most counties additional borrowing power to purchase, build, repair, or refinance an owner-occupied home. The uptick in FHA loan limits for 2019 led some to believe that it might be possible to see another year of higher loan limits, while others speculated that higher limits may not be a trend, but simply a typical course correction for home loan limits. Regardless of which camp 2020 borrowers were in back then, it seems there is another year to contemplate higher loan limits; the Department of Housing and Urban Development has released the FHA loan limits for 2020 and they are indeed higher in most areas. The HUD announcement discussing the overall increase in the FHA loan limit for | more...

December 9, 2019

Applying For A Home Loan In 2020

By Joe Wallace

Are you thinking about buying or building a home in 2020? Prepare for your dream home early and get ready to start the path to homeownership in the new year. Save Early What kind of expenses should you anticipate when saving for your home loan? It’s not just the down payment you’ll need to save for–here is a list of common home loan expenses: Title insurance Appraisal costs Pest inspection fees Origination fees Discount points Credit report fee Survey fee Property taxes Mold abatement (where applicable) Document prep Compliance inspections You will also want to save early for unexpected costs including contingencies where the appraised value of the property is lower than the asking price. Some borrowers like the home so much they are willing to pay the difference in | more...

December 6, 2019

Why Did My Mortgage Payment Increase?

By Bruce Reichstein

There may be circumstances where you find your mortgage payment has increased. There are several reasons why a mortgage payment might increase; regardless of which issue may be affecting your loan it’s crucial to address it right away. Mortgage Payment Increases Due To Interest Rate Adjustment If you have an FHA Adjustable Rate Mortgage, your mortgage payment increases when there is a scheduled interest rate adjustment on the mortgage. The government watchdog agency known as CFPB, the Consumer Financial Protection Bureau, advises, “Some homeowners believe that they have a fixed-rate mortgage loan when their loan actually includes an adjustable-rate or some other feature that can cause their interest rate and payment to change.” Changes To Your Property Taxes If you notice an increase in your mortgage payment, check your monthly | more...

December 4, 2019

Don’t Make These Mistakes With Your One-Time Close Construction Loan

By Bruce Reichstein

The FHA One-Time Close construction loan is meant for borrowers (first-time home buyers or otherwise) who would rather build a house on their own lot instead of buying an existing property. The beauty of the FHA One-Time Close loan is that you can be a first-time home buyer and make the same low down payment of 3.5% as any other FHA borrower. But there are some pitfalls to avoid with FHA One-Time Close mortgages; these are the same mistakes that are made with other home loan transactions, but with a construction loan you may find that more attention is paid to these issues due to the more complex nature of the loan. Avoid Changes In Your Credit Changes to your financial status before loan closing means things like adding more | more...

December 3, 2019

FHA Loan Rules And Your Personal Information

By Joe Wallace

HUD 4000.1, also known as the FHA Single-Family Lender’s Handbook, guides the lender through the entire FHA loan process including how your application data must be processed. In the same way FHA loan rules have a lot to say about where a borrower’s down payment money comes from and verifying the sources of those funds, FHA loan rules also govern how the lender can gather your financial data. For example, did you know your credit scores and other data must be given to the lender from approved sources and that the information cannot come from you even if it’s sealed and hand-delivered? Did you know that HUD 4000.1 does not permit the borrower to handle or transmit other kinds of information to the lender, too? Sourcing counts in both down | more...

December 2, 2019

Home Loans After A Bankruptcy

By Bruce Reichstein

Are you interested in a new home loan but are worried about a past negative credit event such as a bankruptcy? Borrowers sometimes have many questions about FHA mortgages and bankruptcy. One of the most common scenarios asked about include borrowers who are about to be discharged from their bankruptcy and are contemplating a home loan. With low credit scores and a recent bankruptcy, what is a borrower to do in order to become eligible for a home loan once more? In such cases, you need to know the FHA loan rules in HUD 4000.1 which require a minimum waiting time or seasoning period before a borrower can apply for an FHA mortgage once more. The waiting time begins at the time the bankruptcy is discharged. Note that it does | more...