Articles Published in: July 2023

July 31, 2023

FHA Loan Applications: How Soon Is Too Soon?

It’s never too early to start planning and saving for an FHA mortgage. But if you have just discharged a bankruptcy or have entered the job market for the first time recently, you may be subject to waiting periods until you have enough time past the bankruptcy or your first job to qualify. There is a two-year rule for some FHA borrowers. These applicants must have at least two years in the job market or two years beyond the discharge date of certain bankruptcy types. And then there are the borrowers who may have met the minimum time-in-the-job-market requirements but have recently changed the nature of their employment. How many years have you worked as your own boss or a contract employee? If it’s under 24 months, you may need | more...

July 28, 2023

FHA Rehab Loans Versus FHA 203(b) Loans

By Bruce Reichstein

When shopping for real estate, most borrowers are thinking of the kind of mortgage such as the one known as an FHA 203(b). That’s the loan you want when shopping for a house you want to buy as-is; one that meets FHA appraisal standards and requires little to no work on the property to make it eligible for a 203(b) forward mortgage. Then there is another type of home loan option available to FHA borrowers; the FHA 203(k) rehabilitation mortgage, which allows you to buy a fixer-upper and have it brought up to FHA appraisal standards and local code requirements. The FHA 203(k) rehab loan is suitable for both new purchase and refinance applications. Regardless of whether you buy or refinance with an FHA Rehab Loan, you are permitted to | more...

July 27, 2023

Buying A Home? Questions For Your Lender

By Joe Wallace

If you have never purchased a home before, you might be wondering how you can improve the overall experience, get good advice, and make a more informed decision on purchasing a house. One way to do that is to compare lenders (five is a good number) and ask some important questions of each one. Ask Your FHA Lender Which Loans Are Most Popular Some lenders have a lot of interest in some loans and none at all for other FHA loan options. Ask each lender, “What are the most popular mortgages you offer. Why are they so popular?” If the lender can’t offer the type of loan you need, you will need to move on. Not all lenders offer all FHA loans. Some lenders won’t issue manufactured home loans, others | more...

July 25, 2023

Which FHA Loan Is Right For You?

By Bruce Reichstein

There are some home loan options some won’t consider. A shorter loan term is one. In an era where lower monthly payments seem to be the priority for some borrowers more than saving money over the entire course of the loan, a longer loan term makes sense. But for some, these are essential aspects of the loan to consider. If you can afford to pay more each month on your mortgage, would you do so to shorten your loan term? FHA Condo Loans, FHA Manufactured Homes Are you surprised there are separate FHA loans for each property type listed above? These different loans are needed simply because each property type’s considerations differ. Manufactured homes can’t be older than regulations allow, but existing construction homes don’t have the same rule. Condo | more...

FHA Home Loans And First Time Home Buyers

July 24, 2023

FHA Lender Requirements and Bank Policies

By Joe Wallace

Here is a variation on a typical question we are frequently asked. “I applied for a loan and was told I must submit proof of filing a tax extension for a previous tax year. I was told by my loan officer that I need to show proof of an extension to be approved to close. Is this correct?” There are two critical issues in a situation like this to remember. One is how FHA loan rules work and how lender policies work. The FHA loan program is a voluntary one for financial institutions. Not all lenders participate, but those who do have to meet FHA loan standards and observe FHA guidelines for the loan program. Most financial institutions have their own guidelines above and beyond FHA loan program regulations. If | more...

July 20, 2023

Home Loan Approval Questions And Answers

By Joe Wallace

What does it take to get approved for an FHA mortgage? The answers may surprise you. Did you know there are some persistent myths about the FHA home loan program that stop some people from considering it as an option? FHA Loan Myths You Should Know Some believe FHA loans are need-based mortgages, believing that only those with income below a certain level can apply. This is not true. A percentage of new borrowers sometimes believe they must be a first-time home buyer to use government-backed loan programs like FHA home loans. When it comes to some loan programs (USDA loans) this is closer to being true, but not for FHA loans. You can find programs aimed at first-time buyers. But in many cases this is for those who qualify | more...

July 18, 2023

FHA Refinance Loan Myths

By Joe Wallace

FHA refinance loan myths keep some potential borrowers from making a truly informed choice about what to do when applying for a cash-out refinance loan, reverse mortgage, or rehab loan. Know the facts before you decide! FHA Refinance Loans And Changing Lenders It’s a myth that you can’t refinance your home with a different financial institution than what you started with. You are not required to use your original lender when refinancing a mortgage loan. This is true regardless of whether your original mortgage is an FHA loan. Your original mortgage can be refinanced into an FHA loan, even if it is a conventional mortgage or other type of non-FHA loan. You may need to change lenders if your current mortgage is a non-FHA loan and your lender does not | more...

July 17, 2023

How To Get Cash Out Of Your Home

By Joe Wallace

When you buy a house with an FHA loan, you start building equity with your 3.5% down payment. Once you begin making FHA loan mortgage payments, you continue to build equity in your property over the lifetime of the mortgage. But how do you take equity out of your home? We explore some important options below. Home Equity Loans And Home Equity Lines Of Credit The FHA does not offer a home equity line of credit, this is an option available from many conventional lenders and offers you a line of credit using your house as the collateral. The closest an FHA mortgage gets to a home equity loan is the FHA Cash-Out Refinance loan, which does tap into the unused equity in your house. FHA Cash-Out Refinance Loans FHA | more...

July 14, 2023

FHA Loan Options To Consider

By Joe Wallace

There are many options for those who want to buy or refinance a home using an FHA mortgage. Did you know that FHA loans feature a choice between fixed and adjustable rate loans, and that you can add energy efficient features to the home you buy or refinance? These options and many more are option to qualified borrowers who get approved for FHA mortgages. The choices you have with a new purchase FHA loan are varied. In addition to the type of loan–fixed rate mortgage, adjustable rate mortgage, growing equity mortgage loans and others–you also have a choice of housing available to you under the FHA loan program. You can select a typical suburban home, but are not limited to doing so. FHA Loan Types: Condos, Manufactured Homes There are | more...

July 13, 2023

FHA Loan Approval and Late or Missed Housing Payments

By Bruce Reichstein

What is the connection between FHA loan approval and late or missed housing payments? The simplest formula given to most borrowers is that you should come to the home loan application process with nothing but on-time payments on all financial obligations for the last 12 months leading up to the day you apply. Not all borrowers take that advice, and many want to know what the consequences of having a late or missed payment might be; in some cases the issue may be more problematic than others. This is true of having late or missed housing payments on your record. The lender will review your record of housing payments as one of the indications that a borrower is a satisfactory credit risk. But what do the FHA loan rules tell | more...