Articles Published in: September 2021

September 30, 2021

Before You Apply For An FHA Mortgage

One of the biggest worries about buying a home? Having good enough credit to qualify. Do you know what it takes to raise your credit scores? Do you know what it takes to do so without paying a third party to do things on your behalf? Improving your credit scores ahead of an FHA mortgage loan application requires time, which is why financial advisors say it’s best to start early when planning and saving for your loan. Raising your credit scores means changing some basic habits associated with your payments, and getting into new habits can be an adjustment. But that is not the reason why it takes time to repair your credit. There are three basic issues you should be concerned with if you want to raise your score. | more...

September 29, 2021

Do FHA Home Loans Have An Income Cap?

By Joe Wallace

Some borrowers learn that FHA mortgage loans are government-backed and guaranteed by the FHA and HUD, which can lead to certain assumptions about the nature of a government-backed mortgage. One of the misconceptions about FHA home loans is that due to their government association have either an income limit, or are otherwise need-based. Some borrowers might be confusing the government-backed USDA loan program with the FAH loan rules. USDA loans ARE need based. However, FHA loan rules in HUD 4000.1 do not specify a maximum income and do not require a specific financial need to qualify. FHA loans do not have a low-income requirement, a household income cap, or a requirement that you be a first-time buyer. These loans are instead designed for those who want to purchase a home | more...

September 28, 2021

FHA And HUD Announce New Foreclosure Relief Measures For Those Recently Affected By COVID-19

By Joe Wallace

The Department of Housing and Urban Development has announced new COVID-19 relief measures for those with FHA mortgages. This news comes on the heels of a previously issued FHA Mortgagee letter, ML2021-19, “Extension of the Foreclosure-Related Eviction Moratorium and Expiration of the Foreclosure Moratorium in Connection with the Presidentially-Declared COVID-19 National Emergency” which contained the following statement: “HUD’s foreclosure moratorium is set to expire on July 31, 2021, and HUD is not extending that moratorium further”. That statement is true for many; the FHA and HUD have added more help but it is intended for those who have experienced recent financial difficulty because of COVID-19. For those who have already taken advantage of this help, the loan forbearance offered borrowers a chance to save their homes even during the prolonged | more...

September 27, 2021

Buying A Condo With An FHA Mortgage

By Bruce Reichstein

Are you interested in buying a condo unit with an FHA home loan? It’s an option some borrowers don’t realize they have–some make assumptions about the FHA home loan program and the availability of loans for condo units. But the fact is that an FHA mortgage can be used to purchase a condo the same as any suburban home though there are some considerations to remember when making this type of purchase. FHA condo loans feature the same basic qualifying terms as other FHA mortgages for mobile homes, suburban homes, etc. This type of FHA mortgage is, like all other FHA mortgages, open to first-time buyers AND those who have owned a home before (even in the last three years). You will be approved for the FHA condo loan based | more...

September 24, 2021

Home Loans After Chapter 13 Bankruptcy

By Joe Wallace

Those looking for home loans in the wake of a Chapter 13 bankruptcy often get conflicting messages about when, how, and even whether they can apply. Circumstances and causes of bankruptcy may vary, but borrowers often ask the same kinds of questions about what their options are after the proceedings are done. A typical version of such questions may go like this: “I had a bankruptcy that was discharged and I was told I needed to wait two years before I can apply for an FHA loan. But other sources say I have to wait longer. What is the reality? How long do I have to wait to apply?” What follows is advice about how long you might have to wait but keep in mind that the clock starts ticking | more...

September 23, 2021

Bad Credit And FHA Home Loan Options

By Joe Wallace

The term “bad credit” tends to feel a bit stigmatizing. Borrowers who have had past difficulty with credit have it hard enough trying to recover from the stigma of their previous credit issues without being confronted by those problems every time they want to start working on their credit. Is there such a thing as a bad credit FHA loan that can help people become homeowners and get a fresh start with credit? Technically the answer is, “it depends”, which isn’t very reassuring. But the truth of the matter is, there are FHA standards that technically make the concept of a bad credit mortgage a reality. After all, on paper FHA loan rules state that a borrower with FICO scores in the 500 range could still technically qualify for an | more...

September 22, 2021

Buying A Home: Your Down Payment

By Bruce Reichstein

What are the rules for FHA loan down payments? Some first-time homebuyers looking for a first home don’t realize you can’t just make the down payment by providing a check to your lender. There are strict rules about down payments–they must come from approved sources, they must be accompanied by any supporting documentation showing where the money comes from, etc. You, the borrower, are allowed to apply for a home loan and make a down payment on the house you make an offer on, but when you make that down payment you must document the sourcing of the money. As in, where did it come from? A cashed-in investment? That’s permitted under FHA loan rules. Did your down payment money come from a pink slip loan or a credit card | more...

September 21, 2021

Should I Make Two Mortgage Payments Each Month?

By Joe Wallace

Why do some borrowers–those applying for FHA loans or otherwise–choose to make bi-weekly payments on a mortgage? That is, why do some choose to pay two mortgage payments each month? Paying ahead on an FHA home loan is not a new idea nor is it a bad one. There are those who pay more on their home loans each month to gradually whittle down the amount they owe on the loan so that payoff comes earlier. And there are several ways to do that, as we’ll explore below. Unlike some other types of loans, FHA mortgages do not come with a pre-payment penalty and you cannot be billed extra for early payoff of the FHA loan amount. The multiple ways to pay ahead and pay down your mortgage earlier than | more...

September 20, 2021

HUD Announces Fair Housing Discrimination Case In Missouri

By Joe Wallace

If you have ever experienced discrimination while looking for a place to rent or buy as your primary residence, the Department of Housing and Urban Development wants to hear from you. Know your Fair Housing rights–you might not know when you’ll need to use them. The U.S. Department of Housing and Urban Development announced it is bringing charges of housing discrimination against conservators of the Felder Peter King Estate of Ward Protectee, the Estate, and the owners and property manager of duplex and triplex apartments in St. Charles, Missouri. The charges involve alleged housing discrimination “for allegedly refusing to rent an apartment to a prospective tenant because he has two children” Fair Housing Act laws do not permit landlords to deny applicants housing on the basis of family status including | more...

September 17, 2021

FHA Loans Versus Conventional Home Loans

By Bruce Reichstein

If you are planning to look at real estate listings soon or use the help of a realtor to locate a new home, here are some questions to ask yourself about your new home loan; the answers will help you decide whether to pursue an FHA mortgage, a conventional loan, etc. FHA Mortgage Versus Conventional Home Loans: Compare Down Payments Make sure you know your FICO scores in advance of comparing down payment requirements since the amount of cash you will be required to put down is affected by credit scores when those scores are below a specific cutoff. There is more than one standard for FICO scores in this area-FHA loan minimums and lender requirements. Lender standards will apply no matter whether you are applying for FHA or conventional | more...