Articles Published in: 2019

May 16, 2019

FHA Loan Credit Advice

First-time home buyers and experienced home owners alike sometimes need help understanding what it takes to be approved for a major line of credit like an FHA home loan. What does it take to financially qualify for the mortgage and get on the road to home ownership? Buying real estate with an FHA mortgage means making a serious investment of time and money. And that usually begins with budgeting, saving, and working on your credit. Preparing your credit a year in advance or more is a very good way to prepare for the home loan application process. Why? Your lender needs to see at least 12 months of on-time payments on ALL financial responsibilities prior to your applying for the home loan. Anything less than this can hurt your chances | more...

May 15, 2019

Things That Keep You From Getting An FHA Mortgage

By Joe Wallace

What keeps some borrowers from getting an FHA home loan or refinance loan? In some cases the answers are easy, in others they are more complicated. Learn what some of the red flags are for lenders and prepare yourself to get the FHA home loan you need. Automatic Denial Of FHA Home Loans: When Does It Happen? FHA home loans are automatically denied for a variety of reasons. Borrowers with FICO scores lower than 500 are automatically denied, as are borrowers who have applied for a mortgage while they are in a bankruptcy that has not been discharged yet. U.S. citizenship is not required for an FHA home loan, but those who apply without legal standing of some kind (anyone in the country illegally) is automatically turned down for the | more...

May 14, 2019

Refinancing a Second Home With An FHA Mortgage Loan

By Bruce Reichstein

Not all borrowers are first-time home buyers; some who seek to buy a home with an FHA mortgage loan already own property and seek to own again. FHA home loan rules do not single out first-time home buyers, though the program is ideal for anyone who needs a lower down payment and more forgiving credit requirements. Those who have purchased a second home, whether or not they were using an FHA mortgage for that purchase, will likely want to consider refinancing at some point. This makes sense as most homeowners will consider a refi loan for one reason or another. How does the owner of a second home get an FHA refinance loan? Much depends on the type of loan you need; cash-out refinancing, a refinance loan to improve the | more...

May 13, 2019

How To Refinance Your Home

By Joe Wallace

Do you know how to refinance a home loan? If you need to refinance or want to explore your options, there are a variety of mistakes to avoid. Those who don’t check their credit first, those who don’t understand that a refi loan is treated in a similar manner to the original mortgage, and those who don’t shop around for a lender set themselves up to pay more for a loan that is supposed to benefit them. Avoid these common mistakes when exploring your refinance loan options: Refinance Loan Mistakes: Not Checking Your Credit Scores When you applied for your original mortgage, your credit reports were an important part of the process. They will be again, in much the same way in most cases. Know your credit scores and financial | more...

May 10, 2019

FHA Loans For First-Time Borrowers: Debt Ratios

By Bruce Reichstein

One area that is just as important as FICO scores and credit reports to first-time borrowers? The amount of debt versus the amount of monthly income. This is known as a debt-to-income ratio or debt ratio for short; this is just as crucial for a borrower as their FICO scores. Many borrowers already know this; they have spoken to a lender or a housing counselor, or they have done their research already and fully understand that if you have too much outgoing debt and not enough monthly income, your home loan chances are in jeopardy. But what is not as well-known? The fact that there are actually TWO debt ratios the lender will look at. Yes, there are two calculations and if you don’t anticipate the second one you may | more...

May 9, 2019

Fact And Fiction About FHA Home Loan Approval

By Joe Wallace

First-time home buyers and experienced home owners alike may have misconceptions about what it means to get an FHA loan. Here are some of the most common facts and fictions about buying a house with an FHA loan. FHA Loan Fact: FHA Mortgages Have Lower Down Payments and Credit Score Requirements 3.5% down is all that is required for borrowers with qualifying FICO scores. FHA loan minimum standards are more forgiving that some conventional mortgages but you will need to see whether lender standards allow certain lower credit scores to get loan approval with a higher down payment. Lender standards apply in addition to FHA loan minimums. But the fact is, your lender has the ability to work with your FICO scores in many cases. FHA Loan Fiction: You Have | more...

May 8, 2019

FHA Loan Appraisal Issues: Environmental Concerns

By Bruce Reichstein

The FHA appraisal requires attention to a variety of areas in and around the home, but one aspect of the appraisal has to do with assessing safety hazards and environmental issues that could interfere with the borrower’s ability to use the home. In the case of these FHA appraisal rules, the term “environmental” refers specifically to the areas in and around the home. HUD 4000.1, the FHA loan handbook, begins addressing these concerns by instructing the lender: “The Appraiser must report known environmental and safety hazards and adverse conditions that may affect the health and safety of the occupants, the Property’s ability to serve as collateral, and the structural soundness of the improvements”. Such hazards can include lead-based paint, mold, chemicals, and other hazards. One recent addition to the HUD | more...

May 7, 2019

FHA Home Loans: Things To Do, Things Not To Do

By Joe Wallace

FHA home loans, like all mortgages, represent a major investment for a borrower. There are things you should do in the FHA home loan process to get closer to loan approval, and there are things you should definitely NOT do as a new home buyer. Do you know what they are? FHA Loans: DO Work On Your Credit As Early As Possible Your FICO scores will determine the interest rate you are offered and the amount of the down payment required. It’s best to examine your credit report at least a year ahead of your loan application to make sure you have plenty of time to work on credit issues. FHA Home Loans: DO NOT Run Up More Debt Prior To Your Home Loan Opening new credit cards, adding more | more...

May 6, 2019

FHA Appraisals Versus Home Inspections: Facts You Should Know

By Bruce Reichstein

We write about FHA home loans, the FHA appraisal process, and why the appraisal should never be used in place of a home inspection to determine the condition of the home. Borrowers who do not personally arrange for a home inspection and rely on the results of the FHA appraisal alone put themselves at serious risk of buying a home that has hidden problems. Because lenders and other industry professionals sometimes use the term “inspection” when referring to the appraisal, borrowers may assume that the appraisal really IS an inspection (which is more in-depth than an appraisal). But this is not true. Here’s one example why you should not rely on the FHA appraisal to tell you the condition of the home; HUD 4000.1 includes appraisal requirements. Here’s a passage | more...

May 2, 2019

FHA Home Loan Income Limits Do Not Exist

By Bruce Reichstein

Some borrowers confuse the features of the FHA home loan program with other government-backed loans, but when it comes to the question of income limits, FHA borrowers do not need to worry-there are NO income limits for FHA home loans. Those who misunderstand the FHA loan program as a need-based home loan option are likely confusing FHA mortgages with USDA loans, which are need-based and DO have income limits. Real estate purchases with FHA loans are not the same as their USDA counterparts. FHA Mortgages Are Not Just For First-Time Home Buyers We repeat: FHA mortgages are not only for first-time home buyers, and they are not restricted to those who may fall into a lower income category. Any financially qualified borrower can be approved for an FHA mortgage as | more...