Articles in Category: Adjustable Rate Mortgage

October 6, 2023

Buying A Home In A Difficult Housing Market

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...

September 5, 2023

FHA Home Loans And High Interest Rates

By Joe Wallace

Interest rates on FHA home loans, VA mortgages, and conventional equivalents are higher in 2023. Consider the rates listed in the first five days of September, when the numbers reflected rates between 6% and 7.6%. Those numbers are a serious increase from the record-setting interest rate days of 2020. Looking at just one day, 16 September 2020, we learn home loan interest rates were listed below 3% for qualified applicants. Despite the higher numbers we see in the fall of 2023, some borrowers will not wait for rates to come down. Instead, these borrowers are applying, getting approved, and buying now regardless of rates. Why do some choose to buy now? Are they taking foolish risks with their money? Not in all cases. Some borrowers enter the house-hunting process with | more...

July 5, 2023

Is Now A Good Time To Refinance A Mortgage?

By Joe Wallace

Waiting to apply for a refinance loan makes sense if your current mortgage rate is lower than the rates offered now when shopping around for a lender. But some people don’t get to choose the timing of their refinance loan application. Some fall behind on their home loans and use refinancing to get caught up. Others may own a home that needs renovations or major improvements. Some other homeowners applied for an Adjustable Rate Mortgage and their introductory rate period is ending, leading to a series of rate adjustments many choose to avoid through refinancing. Refinancing A Delinquent Mortgage If you’re behind on your home loan payments and you reach out to your lender as soon as possible once you know you are struggling to pay, refinancing the loan could | more...

June 9, 2023

Should You Apply For An FHA Adjustable-Rate Mortgage?

By Joe Wallace

Borrowers considering their FHA mortgage loan options might wonder about an FHA Adjustable Rate Mortgage or FHA ARM loan option instead of an FHA fixed-rate home loan. It is a great idea to compare the features of both types of loan side-by-side to see which might make sense for you. The motivation to do this now has much to do with the interest rate environment we are still dealing with in 2023–in spite of hopes of improvement as the summer wears on. Why would an FHA ARM loan make more sense for some borrowers? Because an ARM offers a lower introductory or teaser interest rate. You may have the option to keep that rate for a full year or as long as ten years. Much will depend on the type | more...

June 1, 2023

Buying Your First Home With An FHA Mortgage

By Joe Wallace

If you’re thinking about buying your very first home and you want to save money on your down payment, an FHA mortgage is an option to consider because of the minimum 3.5% down payment. FHA loans have more forgiving credit requirements than some conventional loans, and the interest rates are traditionally lower than conventional mortgages. Perks of an FHA Mortgage: Pay Off Your Home Early Without Penalty The lender cannot legally charge a penalty for an early payoff of your FHA loan. You can pay extra on your mortgage, make extra payments, refinance the loan, or sell the property to pay it off earlier than scheduled. FHA Loan FICO Score Requirements in 2023 FHA minimum FICO score requirements say you must have a FICO score of 580 or better to | more...

May 15, 2023

How To Apply For An Adjustable Rate Mortgage

By Joe Wallace

Do you know how to apply for an FHA adjustable rate mortgage loan or ARM? The loan limits are the same on FHA ARMs as for fixed-rate mortgages, but your strategy for the loan should be different, as your payments are subject to change over the lifetime of the ARM loan. It’s essential to apply for an adjustable rate loan with a purpose; if you aren’t sure why a fixed rate loan is better for some than an ARM, you aren’t ready for an ARM loan application yet. The Consumer Financial Protection Bureau has sound advice for house hunters interested in an adjustable-rate mortgage, including knowing when you would want an ARM loan and when you would not want one. Have A Game Plan CFPB’s advice includes planning ahead for | more...

February 15, 2023

FHA Fixed-Rate Mortgages Versus Adjustable Rate Mortgages

By Joe Wallace

What’s the difference between a fixed-rate mortgage and an adjustable-rate home loan? In 2023, you may find advantages in both types thanks to inflation and a recovering housing market. FHA single-family home loans come in a variety of types; both fixed-rate loans and those with adjustable rates. The rules for these loans, commonly referred to as FHA ARM loans, are spelled out in HUD 4000.1, the FHA Lender’s Handbook. Fixed rate home loans backed by the FHA are essentially what their name implies; a mortgage with a rate negotiated between the borrower and lender that does not change for the entire loan term. Borrowers who later want to apply for a lower rate can apply for FHA refinancing, including options such as the FHA Streamline Refinance loan program for FHA-to-FHA | more...

June 22, 2022

FHA Loans And Rising Rates

By Joe Wallace

If you need to buy a home with an FHA mortgage but you are concerned about rising interest rates, there are some things you can do to help yourself make a more informed choice about your FHA loan options. There are options to haggle with the seller, and there are loan options to consider like an FHA Adjustable Rate Mortgage. In the meantime, you can work to improve your FICO scores which helps the lender offer you a lower interest rate. When it comes to negotiating with the seller, you may find the asking price is too high in general, or you may be looking for a price offset because of rising mortgage loan rates. But it may be tough to sell the idea of a lower price. Instead, you | more...

June 15, 2022

FHA ARM Loans: Good Or Bad Idea?

By Joe Wallace

Why do people choose FHA adjustable-rate mortgages or choose to refinance with one? There are several reasons including the need to get into a lower rate upfront, as part of an overall strategy for buying and selling the home, or to take advantage of changing interest rates. ARM Loan Basics FHA Adjustable Rate Mortgages feature an introductory rate, and that rate expires after a set amount of time, typically one year. The introductory rate can also be set between three and 10 years. After that time period, the rate adjustments begin. Borrowers do better with ARM loans when they have a strategy for dealing with the rate adjustment periods. Do you plan to sell or refinance before the introductory or initial ARM loan rate expires? That plan works better for | more...

June 6, 2022

FHA ARM Loan Options To Consider

By Joe Wallace

An ARM loan, also known as an adjustable-rate mortgage, allows you to apply for a loan with an initial rate that will increase after the introductory period is over. The lower initial rate is a benefit for some borrowers, but it pays to have a plan on how to handle this type of loan in advance–do you really plan to pay on an ARM for the full term of the mortgage? Or do you want to sell or refinance instead? FHA loan options include ARM loans which may have a one-year intro rate, but you could apply for a three-year, five-year, seven-year, or even 10-year ARM loan. That means that the introductory rate won’t change for that initial period (three years up to 10 years) and then the loan is | more...