Articles in Category: Fixed Rate Mortgage

February 28, 2022

Are You Preparing For An FHA Mortgage?

Getting your credit ready for a home loan application is one of the most important steps in the mortgage planning process. Do you know how to get your credit prepared before the lender pulls your reports and reviews your FICO scores? The first key to doing this right is time. Give yourself at least a year to save and plan for your mortgage. This also gives you enough time to work on your credit and lower the amount of monthly debt you carry. Lowering the balances on your credit cards not only improves your debt ratio, it also potentially enhances your credit card utilization ratio, too. A year of on-time, every time payments for all financial obligations is strongly recommended. This is the most basic credit repair advice you’ll find | more...

February 17, 2022

Planning An FHA Mortgage

By Joe Wallace

When you decide to buy a home, you don’t just walk out and make an offer on a home. There is a planning and saving stage, a house hunting stage, and an application stage of the home buying process. That’s a bit of an oversimplification of how it works, but even as such it shows that there’s a lot to buying a home–the more planning you can do, the better off you will be. One important issue related to the planning stage of the home loan process involves your budget. Figuring out how much home loan you can afford isn’t just about how your finances look today. You will need to look to the future in terms of your job, your income, any raises or promotions that might affect how | more...

February 14, 2022

Getting Your Credit Ready For A Mortgage

By Joe Wallace

FHA mortgages generally have more forgiving credit score requirements than some of their conventional counterparts. If you are thinking of applying for a mortgage you definitely want to start reviewing your credit far in advance of the application–that’s advice we give out here on a regular basis and is fairly “Home Loans 101” type information. Newcomers quickly learn that starting work on their credit as early as possible is the best move they can make in the planning stages of the loan. But what isn’t so entry-level advice? What some credit reporting agencies advise on managing your credit with or without a home loan to plan for. The implications of this advice are basically that credit is not a “set and forget” type of issue; for best results, you’ll want | more...

February 11, 2022

Is There A Smaller FHA Rehab Loan?

By Joe Wallace

The FHA 203(k) rehab loan is an excellent choice for borrowers who need to repair, upgrade, or renovate an existing home. But some borrowers don’t have ambitious, large-scale work to be done and a “full” 203(k) rehab loan might not be appropriate for smaller-scale work. Is there an option for borrowers who need an FHA 203(k) rehab loan but don’t need a very large sum of money to do the work? The FHA Limited 203(k) Rehab Loan The limited FHA 203(k) allows borrowers to apply for rehab loan funds, but the loans in this case have a maximum total repair cost of $35,000 and no repair cost minimum. This type of rehab loan is an excellent choice for borrowers who want to work on the home but without fully refinancing | more...

January 31, 2022

FHA Loan Late Payments And Late Fees

By Bruce Reichstein

What happens if you miss your monthly deadline for FHA mortgage loan payments? Nobody serious about home loan planning goes into the process expecting to have missed or late payments down the line. After all, a missed payment can lead to serious issues with the mortgage if you aren’t proactive enough to deal with them right away. Life can and often does get in the way of our financial obligations. With that in mind, what should you know about missing an FHA home loan payment? To start, there are rules that codify in part how the lender is to proceed. These FHA loan rules for late payments are found in HUD 4000.1 A section in that volume titled “Late Charges” explains what the FHA views as a late payment on | more...

January 28, 2022

FHA Home Loans And First-Time Buyers

By Joe Wallace

Are you considering an FHA mortgage as a first-time homebuyer? There are some important things to remember that can help make your home loan journey better. Consider what follows as things to consider adding to your home loan planning checklist. Monitoring your credit is the first step. If you have not started the planning stages of your home loan yet or are in the earliest stages of that, you’re in a great place to start monitoring and working on your credit. If you are farther along in the process and have not started monitoring your credit, do so as soon as you can for best results. Saving money for your home loan expenses is an important part of the planning phase of your mortgage. You should research real estate blogs | more...

January 20, 2022

Using Military Pay To Qualify For An FHA Mortgage

By Joe Wallace

Some house hunters have questions about the ability to be approved for an FHA mortgage using military benefits as qualifying income. What will a participating FHA lender consider and what will they reject? Much depends on the nature of the benefit and whether it is likely to continue. Why would currently serving military members or military veterans consider an FHA loan instead of using their zero-down VA home loan benefit? There are several reasons why the FHA loan might be a choice these buyers make–some might want to save their VA loan for a bigger home, or they may have already used their VA loan entitlement in an earlier purchase. To qualify for any home loan you need verifiable income. Military income is not a lump sum payment for services | more...

January 18, 2022

Home Loan Myths: 20 Percent Down Payments

By Bruce Reichstein

Why do people still believe you MUST make a 20% downpayment on a home loan? Like other persistent home loan myths (including the one that holds that FHA mortgages are ONLY for first-time homebuyers), the 20% issue has been passed along to unsuspecting first-time home buyers for decades. What is the reality? FHA mortgages require 3.5% down at a minimum. That’s for borrowers who financially qualify with FHA and lender credit score requirements. FHA loan rules in HUD 4000.1, the FHA Single-Family Lender’s Handbook, says that 580 or better is the FHA standard. You will need to ask the lender you choose whether there are higher FICO score requirements with that financial institution. (There often are.) With conventional mortgages, 20% down is typically required for borrowers who want to avoid | more...

January 10, 2022

Buying Your Very First Home With An FHA Mortgage

By Joe Wallace

If you are buying your first home, published reports say you aren’t alone. In December of 2021, a Marketwatch article noted that in 2021, the number of first-time homebuyers increased from 31% to 34%. That information comes via the National Association of Realtors, which also notes that historically, some 40% of buyers have traditionally been first-timers. Do you need a first home or starter home? Those who buy with FHA mortgages are in a good position to buy thanks to lower down payment requirements–only 3.5% for those who financially qualify. Lower down payments can help in ways some don’t expect–such as having more money to pay closing costs and other expenses related to buying a home. Down payment assistance programs in your local area may be able to offset the | more...

January 6, 2022

Getting A Lower Monthly Payment With An FHA Mortgage

By Bruce Reichstein

If you want a lower mortgage rate, refinancing your home loan can help if the interest rates offered to you at the time are more competitive than what you pay under the original home loan. Lower rates can result in lower monthly payments. There are also options to refinance for the express purpose of getting a lower payment but for some, this issue is complicated by an option known as mortgage recasting. When you refinance, you apply for a new loan to replace the old one. The new loan may be for a shorter term or for the same number of years you committed to originally. If you refinance an FHA mortgage using an FHA Streamline Refinance loan, one of the benefits from doing so can be a lower monthly | more...