Articles Published in: 2023

October 10, 2023

Common FHA Home Loan Questions

Got questions about the FHA home loan journey? You are not alone. Many first-timers and experienced house hunters have questions about FHA mortgages. Here are some of the most popular. When reviewing these answers, don’t forget that some issues related to FHA loan approval are circumstantial. Your loan application is typically handled on a case-by-case basis, so it’s smart to assume your circumstances may be unique depending on what the issue is. It always helps to talk to a participating FHA lender. How Much Do I Need To Save For An FHA Home Loan? Expect a downpayment minimum of 3.5% of the sale price of the home. You should also expect to save between 2% and 6% of the total loan amount for closing costs. If you want to know | more...

October 6, 2023

Buying A Home In A Difficult Housing Market

By Joe Wallace

Do you plan to buy a home in 2024? If you are currently planning and saving for your loan, you likely have seen headlines predicting a tough market in the coming months. According to a 2023 article published by CNBC, home prices are expected to keep rising in 2024. Those are observations based on real estate forecasts from the National Association of Realtors and federal agencies. What should you know about buying a home as we head into 2024? In some cases it may be a simple matter of adding extra time into your home loan process for planning and saving. For others, it may be a matter of choosing the right type of mortgage loan. For example, instead of competing for a limited inventory of existing homes, some applicants | more...

October 5, 2023

FHA Loans, Bank Accounts, And Verifiable Income

By Joe Wallace

Some FHA borrowers want to know if they can use a business bank account for verifiable income purposes when applying for an FHA mortgage. Unfortunately, this question is open-ended, and the answers depend on circumstances. These issues are typically handled on a case-by-case basis. Does the business bank account belong to the borrower because he or she is a freelancer or self-employed? Is this an expense account that belongs to an employer? Such situations may have different issues affecting whether funds deposited to this account may be used as verifiable income. Those who are self-employed must provide documentation, including tax records and other paperwork that demonstrate that the income from the business is reliable and likely to continue. Freelance or contract employees would likewise be required to provide evidence that | more...

October 3, 2023

How FHA Loans Differ From Other Government-Backed Mortgages

By Joe Wallace

There are several government-backed mortgage loan programs including FHA mortgage loans, VA loans, and USDA mortgages. What makes FHA mortgages different than VA or USDA home loans? How FHA Home Loans Work The FHA does not lend money to borrowers. Instead, it allows third party lenders who meet FHA standards to underwrite and process FHA mortgage loans, which have a percentage of the mortgage guaranteed by the government. That makes the potential losses to the lender lower should a borrower default on the mortgage. FHA home loans have lower credit score requirements, feature lower required down payments, and have borrower-friendly rules such as a requirement that there be no financial penalty for early payoff of the mortgage. FHA loans are backed by the government, making them a better deal for | more...

Home Buying, FHA Loans, And Mortgage Trends

October 2, 2023

Money, Planning, And Your FHA Mortgage

By Joe Wallace

Some borrowers need help getting ready for the unexpected during the home-buying process. The unexpected can come in the form of a seller deciding they no longer want to sell the property, the borrower losing a job while the loan is on the way to closing day, or other issues. But more mundane, unexpected things crop up along the way, such as certain fees and expenses situationally related to buying a home. Not all borrowers have to pay them, but when circumstances require it, paying for unexpected contingencies like compliance inspections or hazard insurance may require you to be more creative with your finances. Do you have a contingency plan for those compliance inspections, pest control, hazard insurance, or initial property taxes that need to be settled before the home | more...

September 26, 2023

Who Gets Involved In Your FHA Home Loan?

By Joe Wallace

Buying a home with an FHA loan involves more than just three people; the buyer, the seller, and the participating lender’s loan officer. Third parties are typically involved in your transaction as you make your way to closing day and home ownership. Who are these third parties and why do you need to know them? They can include title companies, home inspectors, pest control, and real estate agents. Knowing the service providers are in your area is key since you will need to compare services and prices before you commit. Title Search For The House You Want To Buy A title search is a crucial step in the home buying process. Don’t buy a home without a title search as you need that process to tell you if there are unresolved | more...

September 25, 2023

Buying A House With More Than One Living Unit

By Joe Wallace

FHA mortgages are not limited to single-unit homes. Did you know that it’s possible to buy a home with an FHA loan that has as many as four living units? First-time home buyers looking for smaller homes might not have considered using an FHA mortgage to buy a house with multiple living units. And doing so is not for everyone. But for those who do need that larger home, it’s an option worth looking into for more than one reason. Multi-Unit Home Purchases Using An FHA Mortgage? FHA loan rules in HUD 4000.1 permit the purchase of house with up to four living units without changing the basic loan approval structure. You won’t be asked to make a down payment larger percentagewise than for a single-unit home. That said, a | more...

September 22, 2023

Before You Buy Your First Home

By Joe Wallace

Are you a first-time home buyer? The house hunting process is one that is best approached with some planning, and you will find plenty of advice online about what to do ahead of your loan application. But what about what NOT to do? There are fairly obvious things not to do. Nobody should apply for a car loan while buying a home, for example. You should not quit your current job, or make major financial changes while trying to convince a lender you are an acceptable risk for a home loan. But what about the other things to avoid when buying your new home? Don’t Take The First House You Really Like Some borrowers get emotional about the first property they find that they could see themselves owning. If you | more...

September 21, 2023

FHA Home Loan Questions, FHA Home Loan Answers

By Joe Wallace

First-time home buyers looking for an affordable home loan often turn to the FHA mortgage. The low downpayment requirement for those who financially qualify is an option worth looking into. Many first-time FHA borrowers have questions. Here are some of the most frequently asked. Do FHA Borrowers Need A Real Estate Agent? A real estate agent is not a requirement when you buy a home with an FHA mortgage. That said, many prefer to work with a real estate agent or realtor since they can be helpful for those who don’t know the local area and to those who need help finding a home near the right services. Some house hunters are simply are not comfortable navigating the purchase of a home and in such cases a real estate agent | more...

September 19, 2023

How Much FHA Loan Do You Need?

By Joe Wallace

How much can you borrow with an FHA mortgage? If you are looking at FHA loan limits as a new home buyer, it’s easy to assume those numbers represent the total amount that the lender will offer once the loan application is approved. But should you expect to borrow that maximum loan amount? FHA Loan Limits 101 FHA loan limits vary. They are not identical for all housing markets or housing sizes. There is a maximum loan amount for high-cost counties, FHA loan limits are higher for multi-unit homes, and there is a lower FHA loan limit in areas that don’t cost as much as the most expensive housing markets. What To Know About FHA Loan Limits FHA loan limits have a maximum or “ceiling” for high-cost housing markets and | more...