Articles Published in: February 2020

February 28, 2020

Mortgage Rate Trends: Eight Year Lows

With mortgage loan interest rates at eight-year lows, coronavirus fears, and a lot of market watching in the second month of 2020, it seemed like a good idea to resume a feature we had posted here for a good long while; a regular look at mortgage loan interest rate trends. And those trends are well worth watching at the moment; FHA and VA mortgage loan rates are advertised (at the time of this writing) at a best-execution 3.0%. You read that correctly, some FHA lenders are reporting mortgage loan rates at a flat three percent. That requires some caveats; not all lenders offer that rate, not all borrowers qualify for that rate, and not all lenders adjust their mortgage loan interest rates in the same way, the same amount, or | more...

February 27, 2020

Low Home Loan Interest Rates: How Long Will They Last?

By Joe Wallace

Mortgage loan interest rates and the coronavirus–how low can they go? COVID-19 and coronavirus headlines have, via investor reaction to the headlines and the situation in general, greatly affected mortgage loan interest rates, pushing them to lows not seen in quite some time. Investors are putting more funds in safer investments, which can serve to put downward pressure on mortgage loan interest rates. The rates have fallen to incredible lows in 2020; not many expected rates to fall THIS low and some homeowners are scrambling to refinance and take advantage of lower rates and less costly monthly payments. Some borrowers might feel as if maybe they owe it to themselves to try to buy or refinance with mortgage rates as low as they are now; 3.25% for FHA and VA | more...

February 26, 2020

FHA Loan Interest Rates: How Low Can They Go?

By Bruce Reichstein

In the first eight weeks of 2020 we have seen home loan interest rates plunge to eight-year lows. Mortgage rates for FHA home loans have sunk to 3.25%, due in part to the latest developments in the coronavirus which saw investors putting more money into safe-haven investments. That’s behavior that affects mortgage loan interest rates. The headlines themselves have no effect but investor reaction to those headlines makes quite a bit of difference. And many are inspired to look at their purchase loan or refinance loan options when the rates are advertised as low as 3.25%. When you read financial websites, you’ll find plenty of disclaimers associated with how the latest interest rates are displayed. Some consumers want to know what the phrases “top tier scenarios” and/or “best execution” have | more...

February 25, 2020

Corona Virus Headlines And FHA Mortgage Rates

By Joe Wallace

The headlines recently have said it all; “Coronavirus fears cause mortgage rates to plunge to 8-year low”. That’s courtesy of CNBC, not one of the many many amateur finance blogs or fly-by-night junk stock purveyors. What’s the reality behind the headline? FHA and VA home loan rates for Monday, February 25 2020 were reported at 3.25%, which is definitely one of the lowest points the rates have fallen to in the last several years. There is speculation that rates might broach new territory where historic lows are concerned; whether this actually happens or not remains to be seen. Why do interest rates move higher and lower? There is no single factor, just as there is no single factor that goes into a home loan transaction; it’s a complex operation featuring | more...

February 24, 2020

FHA Mortgages For First-Time Borrowers In 2020

By Bruce Reichstein

What makes FHA home loans a great option for first-time home buyers? Anyone purchasing their first real estate, working with a realtor, and getting their credit ready for a home loan for the first time should know about the FHA mortgage program and it’s lower interest rates and flexible income requirements. FHA Loan Guidelines Are More Flexible It’s true that FHA mortgages require a borrower to have two years of employment history. But that history requirement does not have to be with a single company or employer. Borrowers should know that some frequent job changes are acceptable to FHA lenders, but overall your employment record is reviewed on a case-by-case basis when necessary. You may want to explain any unusual job circumstances to a loan officer up front to see | more...

February 20, 2020

FHA Home Loans For Borrowers With Thin Credit

By Bruce Reichstein

Some borrowers worry their FICO scores aren’t high enough to be approved for a home loan. Other borrowers worry that they don’t have a long enough credit history. There are ways you can raise your FICO score, increase your credit file, and make yourself a better credit risk for an FHA home loan, FHA rehab loan, or even a construction loan to build your own house on your own lot. If you apply for a home loan with thin credit non-traditional credit or no credit, your lender will ask for any evidence you have made recurring payments of some kind. That’s a good place to start when it’s time to review your credit. Your lender will want to see that for any financial obligation you do carry, that on-time payments | more...

February 19, 2020

For Borrowers Who Need Down Payment Help

By Joe Wallace

Buying a home is a major investment. And unless you are applying for a need-based loan such as a USDA mortgage, or if you are a qualifying veteran or military member applying for a VA mortgage, you will need to come up with a down payment. Borrowers who use conventional loans typically make larger down payments than those who use government-backed mortgage loans like FHA loans. Why? Because government-backed mortgages carry an advantage for the lender; they are guaranteed against loan default and foreclosure. Should the worst happen after the loan has closed, the government pays the lender a portion of the mortgage. It’s called a claim when this happens, and such claims are a risk of doing business in the mortgage market. Reduced risk for the lender is a | more...

February 18, 2020

Income Rules For FHA Loan Approval: What You Need To Know Today

By Joe Wallace

FHA home loans, like other mortgages, require the lender to make sure their applicants have enough income to be able to realistically afford the loan. This is known as “qualifying income” and the lender is only permitted to use earnings that meet FHA standards. Those paychecks must be stable, and likely to continue for the purpose of debt-to-income ratios and other loan approval procedures. Those regulations apply regardless of whether you are buying existing construction or want to build a house on your own lot using an FHA construction loan so it’s important to be familiar with them. Military Pay And Earnings: Yes, military people have access to the GI Bill and the VA home loan program, why would they need an FHA home loan? There are actually many reasons, | more...

February 13, 2020

Get A Better Home Loan Deal By Asking One Question

By Joe Wallace

Some people are born negotiators, and they don’t mind telling the rest of the world about it. But more people seem to feel uncomfortable with the idea even when it’s in their best interest to do so. Are you trying to buy a home? If so, you’ve already committed to spending a lot of money to make this important investment. Why pay MORE if you don’t have to? Negotiating the details of your home loan can save you money and get you a better deal. Does it have to be uncomfortable and awkward? No. Actually, you can negotiate quite successfully by asking one simple question, but that question needs a bit of homework to ask properly. What’s the secret to negotiating a loan? What is that one question? before we | more...

February 12, 2020

Why Buy A Home In 2020?

By Bruce Reichstein

There are many reasons why it’s smart to think about looking for a forever home in 2020; owning instead of renting, the ability to freely customize your living space, being able to apply for cash-out refinancing to convert part of your home’s value into cash, and never having to wait for a landlord to fix a problem in the home. But in 2020 there’s another reason to consider owning a home soon; a Zillow.com report indicates that 2020 is going to be a good year for home values depending on the housing market. The Zillow Home Price Expectations Survey from the 4th quarter of 2019 includes data that indicates U.S. home values may grow by 2.8% in 2020. Rising or hot-again housing markets in the new year include Austin, Texas | more...