Articles by: Bruce Reichstein

December 27, 2019

FHA Rehabilitation Loans In 2020

Are you interested in buying and fixing up a home, or refinancing and remodeling your current home? These are projects are possible in 2020 thanks to the FHA Rehabilitation Loan, also known as the FHA 202(k) Rehabilitation Loan or the refinance loan version of it. The FHA has a program that allows borrowers to apply for a mortgage loan in order to improve a property. The FHA 203(k) rehab loan is intended for borrowers who want to buy or refinance the property and do repairs, but not all borrowers have big rehab projects or work that requires a huge sum of money. Two Rehab Loan Options Open To You There are two different types of 203(k) loans-the “full” version is available for larger projects including work on loan-bearing structures, but | more...

The FHA One-Time Close Construction Loan: An Option In 2020

December 24, 2019

The One-Time Close Construction Loan: An Option In 2020

By Bruce Reichstein

FHA home loan options in 2020 don’t have to be limited to getting a home loan to purchase existing construction property; there is a way to apply for an FHA mortgage that lets you have a home built to suit from the ground up on your own land. These construction home loans, known as One-Time Close construction loans, are offered by the FHA, the VA, and even the USDA and can help even a first-time homebuyer get a house built to their specifications with a low down payment. Yes. you read that correctly. First-time home buyers are permitted to apply for the One Time Close construction loan. So are experienced homeowners. One-Time Close construction loans are good for borrowers who want a home that meets their standards, but the loan | more...

December 20, 2019

FHA Mortgages And Conventional Loans: Which Is Better?

By Bruce Reichstein

Are there real differences between FHA mortgage loans and conventional real estate loans? The short answer is yes, the first and most basic difference is that an FHA mortgage is guaranteed by the government, where a conventional loan is not. And there are many other differences. The government’s guarantee to the lender to back a certain portion of each FHA mortgage makes the loan a better risk for the financial institution offering you a line of credit. It doesn’t matter if you want to build a home on your own lot, buy a condo unit, or a mixed-use property (that’s mostly residential). There are FHA loans for all those purposes and at the same low down payment requirements that FHA mobile home loans and single-family houses have. Just because you | more...

December 17, 2019

FHA Home Loan Limits: Facts You Should Know In 2020

By Bruce Reichstein

What kind of loan do you need in the new year? Are you interested in an FHA One-Time Close construction loan to build on your own land? An FHA purchase loan for existing construction? You’ll need to know a bit about home loan limits and how they affect your transaction. The FHA and HUD announced higher loan guaranty limits for another year–2020 rates will increase in many housing markets with a small number of areas receiving no increases. Conforming Loan Limits In 2020 A conforming loan is a mortgage meeting guidelines established by Fannie Mae and Freddie Mac including a maximum dollar amount. Your FHA home loan can be at or below a certain amount established each year by county. Conforming loan limits are basically the Fannie and Freddie limits | more...

December 13, 2019

5 FHA Loan Facts To Remember When House Hunting

By Bruce Reichstein

There are five basic things to remember when house hunting that can help you make better choices about your loan and the home you want to purchase with it. FHA mortgages are for those who intend to own and occupy the home as their primary residence, so if you are looking to find a home to live in, keep reading! FHA Home Loans Are Available For Fixer-Uppers If you want to buy a home you are sure won’t pass an FHA appraisal, you can still buy the property using an FHA 203(k) Rehabilitation Loan instead of the FHA 203(b) loan used to buy homes that can pass the appraisal process. FHA 203(k) Rehab loans come in two sizes, one known as the Limited 203(k) for smaller projects that don’t involve | more...

Build on your own lot. Construction loan basics

December 11, 2019

Build On Your Own Lot: Construction Loan Facts

By Bruce Reichstein

If you are interested in building a home on your own lot instead of buying a house owned by someone else, the One-Time Close construction loan is an option worth considering. Facts about One-Time Close mortgages include your options–there are FHA, VA and USDA versions of the One-Time Close Construction (OTC) loan. With a VA OTC, there is an option to put 0% down, FHA construction loans feature a low down payment of 3.5% of the adjusted price of the home in most cases. Construction loans require you to work with an approved contractor so you should plan on spending some time searching for one. Construction loans are sometimes hard to come by because borrowers don’t know the right loan to ask for, or are working with a lender who | more...

December 10, 2019

Higher FHA Home Loan Limits For 2020

By Bruce Reichstein

In 2019, the FHA and HUD announced higher loan limits, giving borrowers in most counties additional borrowing power to purchase, build, repair, or refinance an owner-occupied home. The uptick in FHA loan limits for 2019 led some to believe that it might be possible to see another year of higher loan limits, while others speculated that higher limits may not be a trend, but simply a typical course correction for home loan limits. Regardless of which camp 2020 borrowers were in back then, it seems there is another year to contemplate higher loan limits; the Department of Housing and Urban Development has released the FHA loan limits for 2020 and they are indeed higher in most areas. The HUD announcement discussing the overall increase in the FHA loan limit for | more...

December 6, 2019

Why Did My Mortgage Payment Increase?

By Bruce Reichstein

There may be circumstances where you find your mortgage payment has increased. There are several reasons why a mortgage payment might increase; regardless of which issue may be affecting your loan it’s crucial to address it right away. Mortgage Payment Increases Due To Interest Rate Adjustment If you have an FHA Adjustable Rate Mortgage, your mortgage payment increases when there is a scheduled interest rate adjustment on the mortgage. The government watchdog agency known as CFPB, the Consumer Financial Protection Bureau, advises, “Some homeowners believe that they have a fixed-rate mortgage loan when their loan actually includes an adjustable-rate or some other feature that can cause their interest rate and payment to change.” Changes To Your Property Taxes If you notice an increase in your mortgage payment, check your monthly | more...

December 4, 2019

Don’t Make These Mistakes With Your One-Time Close Construction Loan

By Bruce Reichstein

The FHA One-Time Close construction loan is meant for borrowers (first-time home buyers or otherwise) who would rather build a house on their own lot instead of buying an existing property. The beauty of the FHA One-Time Close loan is that you can be a first-time home buyer and make the same low down payment of 3.5% as any other FHA borrower. But there are some pitfalls to avoid with FHA One-Time Close mortgages; these are the same mistakes that are made with other home loan transactions, but with a construction loan you may find that more attention is paid to these issues due to the more complex nature of the loan. Avoid Changes In Your Credit Changes to your financial status before loan closing means things like adding more | more...

December 2, 2019

Home Loans After A Bankruptcy

By Bruce Reichstein

Are you interested in a new home loan but are worried about a past negative credit event such as a bankruptcy? Borrowers sometimes have many questions about FHA mortgages and bankruptcy. One of the most common scenarios asked about include borrowers who are about to be discharged from their bankruptcy and are contemplating a home loan. With low credit scores and a recent bankruptcy, what is a borrower to do in order to become eligible for a home loan once more? In such cases, you need to know the FHA loan rules in HUD 4000.1 which require a minimum waiting time or seasoning period before a borrower can apply for an FHA mortgage once more. The waiting time begins at the time the bankruptcy is discharged. Note that it does | more...