Articles Published in: 2023

November 17, 2023

FHA Loan Occupancy Guidelines You Should Know

Did you know that occupancy is a requirement when you buy a house with an FHA loan? FHA policy for occupancy requires at least one borrower obligated on the mortgage to take up residence in the home as the primary residence. This must happen within a “reasonable time” of loan closing, normally 60 days, unless you make other arrangements with the loan officer. FHA Loan Occupancy Rules For Single-Family Homes HUD 4000.1 is the FHA Single-Family Lender’s Handbook. In that handbook, you’ll find regulations covering occupancy as a condition of FHA loan approval. You won’t be approved for an FHA mortgage if you aren’t planning to use the home purchased with your loan as your primary address. How Will The FHA Know You Occcupy The Home? Loan officers are busy | more...

November 15, 2023

When It’s Time To Close Your FHA Mortgage

By Joe Wallace

Congratulations! You selected a home to buy with an FHA mortgage, your chosen FHA lender has approved your application, and the seller accepted your offer. Getting ready for closing is the next step in that process, and many newcomers ask what happens on Closing Day? Closing day is a huge milestone for both buyers and sellers. The seller moves out and surrenders the property per your sales agreement and the borrower accepts the keys to the home. On closing day, there is an update to the deed to the home, changed to be in the buyer’s name. You will also be expected to sign all the other paperwork needed to take possession of the home. Closing day typically happens within two months of making the deal, but much depends on | more...

November 14, 2023

How Much Should You Save For A Downpayment?

By Joe Wallace

How much should you save for a down payment on a home? It’s a common question that sounds like it should have a simple answer. The lowest down payment possible for an FHA mortgage is 3.5% of the price of the home. But how much should you aim for when setting your budget to save up for that downpayment? The short answer is no. But why? FHA Loan Down Payment Issues Consider a hypothetical that involves a home on sale that you buy with an FHA mortgage. The home sells for $150 thousand, and 3.5% of that amount is $5,250. That is not how much you’ll need to pay at closing time. You’ll also need to pay closing costs, which are separate from the down payment. Closing Costs A good rule | more...

November 13, 2023

Loan Options For Remodeling Your Home

By Joe Wallace

In the last quarter of 2023, mortgage rates and high house prices are negatively affecting the home improvement industry. That may lead to higher costs associated with remodeling your home. Bloomberg published an article in late 2023 noting that home improvement spending hit major highs during the pandemic; Lowes, Home Depot, and other brands may have earned more from these endeavors during lockdown, but the numbers may be telling a different story post-pandemic. And prices are going up. When remodeling costs rise, some borrowers only scale back their plans to the most needed repairs. But even with a less ambitious plan, funding is still needed, especially with Lowes and Home Depot prices creeping higher for raw materials and tools. Fortunately, there are FHA home loan options that can help. Home | more...

November 8, 2023

Credit Scores For Home Loan Approval

By Joe Wallace

What credit score do you need to be approved to buy a home? The answer to that question can change depending on the type of home loan you seek and the options you want. For example, FICO score requirements to be approved for a manufactured home loan may be lower than those who want to build a home from the ground up using a One-Time Close construction loan due to elevated risk to the lender. Construction loans are higher-risk transactions for a participating lender than manufactured homes. That means the FICO score requirements from your lender are likely to be different than a government-backed home loan program’s minimums. What FICO scores do you need to be approved to buy a home? FHA FICO Score Requirements FHA loan guidelines say FICO | more...

November 7, 2023

FHA Announces Manufactured Housing Appraisal Updates

By Joe Wallace

If you need an FHA manufactured home loan, you may benefit from updated FHA and HUD appraisal policies announced in November 2023. The FHA published its revised manufactured housing guidelines, specifically for the appraisal of manufactured homes certified under Fannie Mae’s MH Advantage and Freddie Mac’s CHOICEHome programs. These homes and other manufactured housing now get added consideration in the appraisal process when there are less than the required amount of “certified manufactured homes available.” FHA Loan Appraisal Changes Explained When the FHA changed its policies, the new rules ordered FHA appraisers to use “the most appropriate” comparables “when there are less than two comparable sales of these certified manufactured homes available.” A “comparable” is a similar property type the FHA appraiser can review side-by-side with the property being appraised | more...

November 6, 2023

Mortgage Interest Rate Trends In Late 2023

By Joe Wallace

In the last quarter of 2023, the Fed paused its interest rate hike campaign. First-time home buyers sometimes ask whether that means a pause on changes to FHA home loan interest rates. The short answer is no, and we’ll explain why below. Fed Rate Hikes Versus Home Loan Interest Rates The first thing to know? The Fed does not directly control mortgage rates but its actions do affect them less directly. Fed actions to increase rates are aimed at the lender side of the operation; when it pauses rate hikes, the Fed is putting increases on hold that affect how much it costs a lender to loan you money. The lender’s increased costs are passed on to the consumer through higher mortgage rates. What It Means When The Fed Pauses | more...

November 2, 2023

Do You Need Down Payment Help?

By Joe Wallace

Saving for your down payment early is a great idea, and doing so can be easier when you have a clear goal in mind. But how much IS that down payment, and when should I start doing the math? Some people are intimidated by saving up for and making the down payment. Even the most disciplined house hunter used to cutting corners for a bigger goal might need some outside help regarding the down payment needed to buy a home. FHA Loans Require Less Money Down FHA mortgages have lower down payment requirements than conventional loans, especially if you want to avoid Private Mortgage Insurance on a conventional mortgage (20% is usually required in such cases). State agencies and other entities operating at the local level often offer down payment | more...

October 31, 2023

5 Tips About Home Loans

By Joe Wallace

What do you need to know about home loans? There are certainly more than five things you’ll want to remember, but this is a great way to begin the planning stages of your new home loan. Home Loan Tip #5: One Application At A Time When you are in the planning stages of a new home loan, it might not occur to you (at first) to think of all your finances as a single entity. This is important because your lender will certainly do so, and if you have applied for any other credit in the meantime it can make it harder for your loan officer to justify approving your home loan. Plan on applying for ONE line of credit in the year you commit to the loan–your mortgage. Home | more...

October 30, 2023

Using Downpayment Assistance With Your FHA Loan

By Joe Wallace

If you want to offset higher interest rates when buying a home, it may be worth your time to investigate your options for a local downpayment assistance program. These are offered in your state, not by the FHA or HUD. Buying a home using downpayment assistance can help you save more upfront on the mortgage but can also be an advantage because you can use the money saved for the downpayment in other areas for your new home instead. Using a DPA may also help you to hang on to more of the money you saved for the downpayment to use toward mortgage payments. It’s a smart idea to pay more than the minimum due each month. It helps you save money over the term of the mortgage. But what | more...