Articles Published in: 2019

February 26, 2019

Plan Ahead For Your First Home FHA Loan

You can never start planning too early when it comes to buying your first home. There are a lot of variables to take into account when planning your FHA home loan including the nature of your home loan itself. FHA Home Loans: Different Loans For Different Needs The first-time home buyer who wants to buy real estate that needs repairs will apply for a different FHA home loan than those who want to have a home built for them from the ground up using an FHA One-Time Close construction loan. The FHA fixer-upper loan is known as an FHA 203(k) Rehabilitation mortgage and can be applied for as either a new purchase loan or a refinance loan. The type of FHA loan you will need for mobile homes/manufactured housing is | more...

February 25, 2019

FHA Loan Qualifying Credit Scores

By Joe Wallace

FICO scores are a big part of getting your home loan approved as a first time home buyer or repeat borrower alike. One of the first questions someone purchasing their first home with an FHA loan will ask is what FICO scores qualify for the mortgage. And that’s not surprising; FHA loan credit qualifications do specify a minimum FICO score for all borrowers. And believe it or not, it’s the same credit score ranges for both first-time borrowers and those who have purchased real estate before. The FICO score minimums for the lowest down payment are set by the FHA and HUD, with these minimums often being increased by participating lenders based on that financial institution’s standard. So what you read below about qualifying FICO scores is the baseline score | more...

February 22, 2019

Is Now The Right Time To Buy Your First Home?

By Bruce Reichstein

Is now the right time for a first-time home buyer to look at real estate listings and consider buying that first home? Is now a good time for those who have owned property before to examine their FHA mortgage loan options? In both cases, the answer may be yes. Recent headlines and reports by companies like Zillow and CNBC indicate rising optimism in the housing market in the first quarter of 2019; inventory is increasing and mortgage loan applications have gone up recently, too. Ask any real estate agent about the state of their market and you may learn that now is a good time to explore your home ownership options. Why choose an FHA mortgage in a climate like this? The low down payment requirement is a good start-you | more...

February 21, 2019

FHA Home Loans And Qualifying Income: Disability Benefits

By Joe Wallace

When you apply for an FHA home loan to buy real estate, your lender will need to verify your income and employment. Some borrowers may wish to submit disability income for consideration but aren’t sure if that income will qualify. FHA loan rules address these concerns; HUD 4000.1 instructs the lender how to verify disability income, and defines how disability income may qualify. According to HUD 4000.1, the lender is required to “verify and document the Borrower’s receipt of benefits from the SSA, VA, or private disability insurance provider. The Mortgagee must obtain documentation that establishes award benefits to the Borrower. “ What Disqualifies Disability Income From Consideration For An FHA Home Loan If the borrower’s disability income has an expiration date within three years from the date of the | more...

FHA Home Loans And The Biggest Credit Mistake You Can Make

February 21, 2019

Buying A Home With An FHA Mortgage Versus Renting

By Joe Wallace

How much money do you spend renting a home instead of owning one? If you count the security deposit, any applicable pet deposit, and other expenses, the numbers can add up quickly. When you rent a home instead of buying real estate with a mortgage loan, you are also stuck with whatever appliances your landlord has seen fit to install in the home, regardless of quality. You have to live with someone else’s interior design and paint scheme preferences, and chances are the carpet is not what you would have chosen…at all. Renting A Home: Where Are The Long-Term Financial Benefits Compared to Home Ownership? When you rent, you get no equity, no cash-out refinance loan option, and no ability to sell the home at a higher price than you | more...

What Credit Score Is Needed For An FHA Mortgage?

February 20, 2019

How Does An FHA Mortgage Help A First-Time Home Buyer?

By Bruce Reichstein

When it’s time to buy that real estate you’ve had your eye on, how can an FHA mortgage help out a first-time home buyer? What do you need to know about FHA loans that can help you make the most informed choices? FHA Loans Offer Lower Credit Requirements Yes, there are conventional home loans you may qualify for with lower FICO scores, but you may face larger down payment requirements, which means more money out of pocket up front. FHA home loans require a 3.5% down payment for those with FICO scores 580 or higher. Lender standards may be higher than this, but the FHA minimums are lower than conventional loans. FHA Loans Allow Certain Closing Costs To Be Financed Ask your lender which closing costs of your specific transaction | more...

February 19, 2019

What You Should Know About FHA Home Loan Credit Checks As A First-Time Home Buyer

By Joe Wallace

Before you get FHA home loan approval on that piece of real estate you have your eyes on, your mortgage loan application process will include a credit check. Your lender will need to determine your creditworthiness, and also verify your employment and income. Most borrowers expect this process and thanks to having other kinds of credit applications including credit cards, auto loans, and student loans, have a basic idea of what will happen. But not everyone expects that their initial credit check for the home loan they are applying for will NOT be the last one the lender does before the loan closes. You might not get the down-low on this from your real estate agent or your lender, but this is one of the “secret” things about the home | more...

February 18, 2019

Happy Presidents’ Day 2019

By Bruce Reichstein

Happy Presidents’ Day 2019! Today banks and markets are closed, and we pause from our usual schedule of writing posts and giving information about FHA home loans to observe the holiday. We return with our regular content schedule tomorrow. Thank you very much for reading!

February 15, 2019

FHA Loan Policy Changes Regarding Income, Employment Verification

By Joe Wallace

The FHA and HUD have issued a Mortgagee Letter explaining recent policy changes that affect how borrowers will have their income and employment verified, among other issues. Mortgagee Letter 19-01, issued February 15, 2019, announces the specific inclusion of third-party vendors (TPV) for the purpose of income and employment verification. The change is needed, according to the Department of Housing and Urban Development, because FHA home loan rules in HUD 4000.1 did not previously mention third party vendors specifically. “FHA allows for electronic verifications as an option to a written Verification of Employment but makes no specific reference to TPV services. TPV provides an alternative means for verifying a Borrower’s employment, income, and assets which would eliminate the requirement for a Mortgagee to collect pay stubs, W-2s, and bank statements”. | more...

February 14, 2019

Preparing For A Home Loan As A New Borrower

By Joe Wallace

Preparing for a new home loan requires time. Before you start looking at real estate listings, talking to sellers, or begin filling out loan paperwork, you will need to take several steps ideally started at least a year before you begin house hunting. Begin Saving For Your Down Payment And Other Expenses Now There are appraisal fees, home inspection expenses, possible flood zone determination costs depending on location, closing costs, and the down payment to think about. Start saving as early as possible for these expenses. Start Checking Your Credit Reports Now If you find any items on your credit report that need to be disputed, the process can take many months. Don’t wait until later to take this step, the time you save will be critical later. You do | more...