Articles Published in: August 2023

August 31, 2023

FHA Home Loan Rules And Fair Housing Laws

We report on Fair Housing cases from time to time, a reminder to those looking for housing that there are federal laws that protect against discrimination in housing. But what are the FHA home loan rules in this area? Did you know that the FHA loan program has specific instructions to the lender regarding Fair Housing laws? Those instructions are found in HUD 4000.1, the FHA Single-Family Home Loan Handbook. Page 120 of that handbook instructs the lender, “The Mortgagee is required to comply with all federal, state and local laws, rules, and requirements applicable to the mortgage transaction, including all applicable disclosure requirements and the requirements of the Consumer Financial Protection Bureau (CFPB), including those related to: The Fair Housing Act protects both renters and home loan applicants looking | more...

August 29, 2023

Asking Your Lender For A Better Interest Rate

By Joe Wallace

Mortgage rates are hovering in the 7% range, and there’s no end in sight (at least in 2023) to the higher interest rates reported at the time of this writing. What is a borrower to do when faced with higher rates and the need to purchase a home? There are ways you can get a lower mortgage rate, including buying discount points (used to reduce the mortgage loan rate), improving your FICO scores ahead of your loan application, and considering an adjustable rate mortgage. But there’s another way you can get a lower rate. It’s a twofold process. You must shop aggressively for the lender who offers you the lowest rate, and then when the lender informs you what that rate might be, ask what steps might be taken to | more...

August 28, 2023

How Much Is Your Monthly FHA Mortgage Payment?

By Joe Wallace

When you enter the planning stages for a new home loan, you’ll want to know how to budget for the expenses of your mortgage such as the appraisal fee, down payment, home inspection, etc. But you will also want to know about the monthly mortgage payment–how much it could be, how you need to adjust your personal finances to accommodate the new loan, etc. That’s why one of the most important questions a home loan applicant can ask in the planning stages is, “How much will my monthly mortgage payment be?” It’s easy to assume this is a simple calculation of how much the loan is, divided by how many months the mortgage loan payments are required. But is it REALLY that simple? The truth is that it’s more complex | more...

August 25, 2023

Are You Ready To Close Your FHA Home Loan?

By Joe Wallace

Do you know about the issues that can interfere with your closing day? It does not matter whether you were approved for a conventional, FHA, USDA, or VA mortgage. Some issues are common no matter which loan option you choose. FHA Down Payment Issues Once you have saved the money for your down payment, you are ready to close, or at least that’s what some might be tempted to think. But a key part of the closing process is knowing how that down payment must be paid. Typically you cannot use checks, credit cards, ATM cards, or cash. Borrowers must arrange a wire transfer or a cashier’s check to make the down payment. Discrepancies In Your Closing Disclosure Contact the lender immediately if you find errors or discrepancies in your | more...

August 24, 2023

When It’s Time To Close Your FHA Loan

By Joe Wallace

First-time home buyers and those who haven’t purchased real estate in a while can greatly benefit from using a closing checklist. The Consumer Financial Protection Bureau (CFPB) offers a sample closing checklist you can use to help you remember the essential details you’ll need to address on closing day. It’s easy to overlook an important detail or two as you approach closing day. There is a lot to remember! As the CFPB reminds, a closing checklist can help you keep all those details in one place to keep all your obligations for closing day centralized and at your fingertips. First Things First Your closing checklist should tell you who’s conducting your closing procedure, where that process should happen, and when it is scheduled. How much do you need to pay | more...

August 22, 2023

How Much Will My FHA Appraisal Cost?

By Bruce Reichstein

How much does an FHA appraisal cost? This is a common question, most often asked in conjunction with whether or not the FHA regulates this expense as part of the FHA home loan process. The Cost Of FHA Appraisals And Home Inspections The first thing to remember when budgeting for an FHA appraisal is that you must also set aside money for a home inspection. You should never rely on the appraisal alone to determine whether the home, condo unit, or mobile home or modular home is suitable to purchase. The FHA appraisal costs money, and the home inspection costs money too. Borrowers who balk at paying “twice” for a service that is mistakenly viewed as nearly identical (appraisals are NOT identical to inspections) should know that paying hundreds for | more...

August 21, 2023

Buying A Home In Today’s Market

By Joe Wallace

In August of 2023, many news outlets reported a competitive American housing market with high demand and low inventory still influencing the market. Low inventory today could be partly the result of many house hunters purchasing homes while home loan interest rates were low and hanging onto the property for the long haul. There are other factors, but for most home buyers, a central issue is today’s high interest rates and how much that will affect the overall cost of the loan. What do you need to know about home buying in today’s housing market? Refinancing When Rates Fall Do you need to buy now? If you cannot wait to purchase property and aren’t inclined to sell or get a cash out refinance option, there are other ways to reduce | more...

August 18, 2023

What To Ask An FHA Lender

By Joe Wallace

First-time home buyers examining their FHA home loan options might wonder where to start when it is time to shop around for the right lender. Here are some important questions to ask when you compare banks and home loan options. What Are My Home Buying Options? Approved Property Types Are you looking for a unique type of home like a tiny house? If you seek an unusual property type you’ll need to see whether such a home is approved or acceptable to the lender. Some financial institutions won’t issue loans on unconventional property types, others may have caveats to know before you agree. In general, FHA mortgages are better for more conventional housing types such as condos, townhomes, and manufactured houses. You will have a better chance of finding a | more...

August 17, 2023

FHA Loan Downpayments: What To Know

By Joe Wallace

What do you need to know about the down payment requirements for an FHA home loan? Some of the requirements are simple, but some need a bit of explanation. When you begin saving a downpayment for your home loan, you’ll want to remember the tips provided below. Your Down Payment Is A Separate Expense The amount of your 3.5% FHA loan payment is not affected by what you pay for closing costs and mortgage insurance. None of those expenses count toward your down payment. FHA loan down payments are considered separate. Paying cash upfront for FHA mortgage insurance never results in a dollar-for-dollar reduction in the down payment requirement. Some Are Required To Make A Bigger Down Payment Some FHA borrowers make only the minimum required FHA loan down payment | more...

August 15, 2023

FHA Loan Policies: Interest Rates

By Joe Wallace

When you apply for an FHA loan, one of the most important questions to ask is about interest rates. You want to know how much, over how long, and what options are open to you in terms of fixed or adjustable-rate mortgages. FHA loan rules printed in the FHA Single-Family Lender’s Handbook include a section about interest rates. While the FHA does not set or regulate the interest rates on FHA mortgages. That’s between the lender and the borrower. FHA rules do require the rates to be customary and reasonable but the rulebook does NOT list numbers. FHA loan interest rate policy is basically a hands-off policy. FHA loan rules say that typically under “all currently active FHA single-family mortgage insurance programs,” the borrower and the lender negotiate the interest | more...