Articles Published in: December 2021

December 16, 2021

Shop Around For An FHA Lender

Why should you shop around for your home loan or refinance loan? Aren’t all mortgages and refinance loans pretty much the same? No, actually, you may find a larger degree of variation among lenders in several ways including what kinds of loan they are willing to offer. Shopping around for a lender is always a good idea even if you are fairly certain you want to continue using your current financial institution to get the new loan or refinance. In the same way you want to shop around for the best-used car dealer you can find, you want to find the lender offering the best deal to you for the money you are spending on closing costs, lender fees, etc. FHA home loans may be standardized in many ways–the types | more...

December 15, 2021

FHA Home Loans: Not All Are “Typical” Mortgages

By Bruce Reichstein

Not every home loan application is a typical one. You might be trying to buy a home that doesn’t meet FHA loan appraisal requirements–if you try to apply with a new purchase loan you might not be approved in such cases. But if you are buying a fixer-upper home with an FHA rehabilitation loan you won’t be required to have the home pass the appraisal when the loan closes but you are required to bring it up to minimum standards as a condition of loan approval. See how choosing the right FHA mortgage can make the difference sometimes between loan approval and loan denial? There are plenty of unique situations a lender might encounter–one of them could be yours. For example, are you trying to refinance a home you inherited? | more...

December 14, 2021

HUD Announces Disaster Relief For Kentucky Home Owners In Federal Disaster Areas

By Joe Wallace

The FHA and HUD have announced disaster relief for FHA borrowers who live in the federally declared disaster areas in the State of Kentucky. The declaration was made effective as of December 10, 2021, in the wake of flooding, tornadoes, and other natural disaster-related issues. The President announced major disaster declarations for the following counties in Kentucky: Caldwell Fulton Graves Hopkins Marshall Muhlenberg Taylor Warren An FHA/HUD press release published at HUD.gov adds that there is also relief on a “cost-sharing basis” in Caldwell, Fulton, Graves, Hopkins, Marshall, Muhlenberg, Taylor, and Warren counties. What does the FHA/HUD disaster relief announcement mean for FHA borrowers and homeowners? HUD offers “immediate foreclosure relief” for FHA mortgages in the form of a 90-day moratorium “on foreclosures of Federal Housing Administration (FHA)-insured home mortgages | more...

December 13, 2021

Qualifying For An FHA Loan

By Joe Wallace

Here’s a great example of a common question we are often asked: “How much is the minimum downpayment required for FHA loan? How do I qualify?” The main issue with questions like these is that the question isn’t specific enough to answer to the reader’s satisfaction. Why? Because good credit scores aren’t enough, and lender FICO score requirements, in general, can vary between one financial institution and another. Essentially, what a borrower needs to know when preparing to apply for an FHA mortgage includes (but is not limited to) a list of items. For starters, you DO NOT have to be a first-time homebuyer to qualify for an FHA mortgage. You also don’t have to worry about income caps or household income restrictions for this type of home loan. Some | more...

December 10, 2021

Appraisals Vs. Home Inspections: What You Need To Know

By Joe Wallace

Can you buy a house relying on the appraisal alone to tell you about the home’s condition or should you shell out the money to pay for a home inspection? That’s a question more than one home buyer has answered in the wrong way. Here’s one version of a very common question asked about FHA home loans, appraisals, and the inspection process. “I bought a house and I am discovering major problems and code violations. I did not have a home inspection and was told the FHA does its own inspection. Can you explain why the FHA inspection did not find these violations of code?” To start, the FHA does not inspect homes and you should not expect the FHA appraisal process to be anything more than what it is | more...

December 9, 2021

Do You Need Down Payment Assistance For Your Mortgage?

By Joe Wallace

If you want to buy a home and you worry about the down payment, you may be able to get help from a state or local down payment assistance program offered in your housing market. If you are considering an FHA mortgage, you should know that the FHA itself does not offer down payment help, but does recommend borrowers seek such programs to help lower the overall upfront cost of the mortgage. What kinds of down payment help is available? There are many options depending on the state where you live and whether or not you have owned property recently. One issue that is common for many state-level down payment assistance programs? Being either a first-time homebuyer who has never owned a home before, OR being a former homeowner who | more...

December 8, 2021

Is 2022 Your Year To Refinance?

By Joe Wallace

Are you thinking about refinancing your home in 2022? There are several options to choose from including FHA cash-out refinancing. FHA Cash-out refinance loans are an option for those who have used the home as their primary residence for the last 12 months as of the assignment of the FHA case number. That means that FHA cash-out refi loans are not allowed for investment properties, second homes, vacation homes, etc. If you don’t plan to use a property as your home, the home may not eligible for many FHA loan options. There is one exception–those who inherit property may refinance it without a minimum occupancy requirement. There is one caveat according to the FHA Single Lender’s Handbook: “In the case of inheritance, a Borrower is not required to occupy the | more...

December 7, 2021

Get Ready For A Home Loan In 2022

By Joe Wallace

How do you know if you can afford a home loan? It may seem like a daunting task to estimate a monthly mortgage payment with principal, interest, taxes, and fees, but there are online mortgage calculators that can help. All you have to do is to bring a bit of information to the process to get an idea of how much that house you have your eye on might cost you. Get Started The first thing you want to do is to examine your current monthly debt and compare them to your income. What is the largest amount of a monthly mortgage payment you could afford in your current circumstances? The number you arrive at here is not necessarily the same number you’ll use for your final mortgage calculation, but | more...

December 6, 2021

Thinking About A Mortgage Loan?

By Joe Wallace

If you are considering a home loan but aren’t quite ready to commit yet, you are said to be in the planning stages of your mortgage. That planning phase is quite important and should begin as early as possible so you have plenty of time to save money for your FHA mortgage loan down payment (a minimum of 3.5% down is required), your closing costs, and other loan expenses. There are three basic areas you should pay attention to in the planning stages of your home loan–your savings, your debt, and your credit scores. The credit score portion of the process is obvious–if you don’t start monitoring your credit, work actively to reduce your credit usage and get your credit card balances as far below the 50% line of your | more...

December 3, 2021

What Are FHA Rehab Loans?

By Joe Wallace

What are FHA rehab loans? Simply put, these are home loans you can apply for to buy or refinance a fixer-upper property. FHA rehab loans come as “standard” mortgages but there is also a special FHA rehab loan program for those who have homes located in a federally-declared disaster area. The FHA 203(k) Rehab Loan HUD 4000.1, the FHA loan handbook, describes the FHA 203(k) rehab loan as follows: The Section 203(k) Rehabilitation Mortgage Insurance Program is used to: -rehabilitate an existing one- to four-unit Structure, which will be used primarily for residential purposes; -rehabilitate such a Structure and refinance outstanding indebtedness on the Structure and the Real Property on which the Structure is located; or -purchase and rehabilitate a Structure and purchase the Real Property on which the Structure | more...