Articles in Category: Fixed Rate Mortgage

August 27, 2019

Issues That Affect FHA Home Loan Approval

There are some issues that can affect FHA home loan approval but don’t automatically mean the loan will be denied. Borrowers should be aware of the rules in the FHA single-family home loan handbook, HUD 4000.1 that tell a lender when more attention is needed for a specific loan application. For example, did you know there are two basic types of home loan approval processes? One is a more automated process that happens when the lender uses the Automated Underwriting System (AUS) to review the loan. AUS can be used for borrowers that don’t have certain complications with the loan; borrowers that do have certain issues with their application may find the lender is required to “downgrade” to a “manual” underwriting process that requires more scrutiny on the borrower’s financial | more...

August 14, 2019

FHA Home Loans: A Q&A

By Joe Wallace

Q: What Kind Of Home Can I Buy With An FHA Mortgage? A: You can purchase a single-family home with as many as four living units. FHA home loans can be used to buy condos, mobile homes, town houses, mixed-use properties that are primarily residential (the borrower must live in the property), and manufactured homes. Q: Is Private Mortgage Insurance Required For FHA Mortgages? A: Private mortgage insurance is not required, but FHA borrowers will be required to pay a Mortgage Insurance Premium and an Up-Front Mortgage Insurance Premium (UFMIP) as a part of the mortgage. The UFMIP is paid up front or financed in its’ entirety into the loan amount. The mortgage insurance premium each month is part of the borrower’s monthly payment. Q: Can I Buy A Home | more...

August 13, 2019

FHA Loan Rules For Second Residences

By Bruce Reichstein

One thing you will read often about FHA single-family home loans? They are only intended for owner-occupied residences. So why do some borrowers hear of some homeowners being approved for FHA loans for a second house? There is a provision in HUD 4000.1 that allows an FHA mortgage for a “second” primary residence, as well as a provision for what the FHA and HUD term “secondary residences” under certain conditions. The FHA loan rules say secondary residences are defined as follows: “Secondary Residence refers to a dwelling that a Borrower occupies in addition to their Principal Residence, but less than a majority of the calendar year. A Secondary Residence does not include a Vacation Home. “ FHA loan approval may be possible for a secondary residence when the following applies: | more...

August 7, 2019

Four Questions About FHA Home Loans

By Bruce Reichstein

FHA home loans, like any other mortgage loan transaction, can seem complicated at first. Especially for first-time home buyers who have never applied for a mortgage before. What questions should you ask your lender about this process before you fill out loan paperwork? FHA Home Loan Questions To Ask Your Lender: What Interest Rates Are Available To Me? FHA loan interest rates are determined by several factors, one of which being your credit score. Your lender will need to know your credit score or approximate credit score to give you an idea of the interest rates available to you, so make sure you bring that information to the lender before you ask. FHA Home Loan Questions: What’s The FHA Loan Limit For The Housing Market You Want To Buy Your | more...

August 2, 2019

5 Uses For An FHA Mortgage Loan

By Joe Wallace

There are five good uses for an FHA home loan you should know about, especially if you are a first-time home buyer with no experience in applying for mortgage loans. The right kind of loan awaits you, but first it’s important to determine what the right loan for you might be based on your financial needs and goals. 5. Buy An Existing Home With An FHA Mortgage You can use an FHA mortgage to buy existing construction houses as long as they meet FHA minimum standards and local building code, are primarily residential in nature, and you plan to occupy the property as your home. These homes can be condo units, mobile homes, town homes, multi-unit properties (as many as four living units), or manufactured homes. 4. Buy A Fixer-Upper | more...

July 28, 2019

What You Need To Know About Your FHA Home Loan

By Joe Wallace

What you need to know about FHA home loans as a first-time home buyer includes the terms and conditions of your loan, how loan approval works, and what it takes to qualify for an FHA mortgage. Are you ready for your first home? Keep reading and make note of any areas that need addressing in order to get as close as possible to home loan approval before you fill out the forms. FHA Home Loans Require A Down Payment, But It’s A Low Downpayment FHA mortgage loans require a minimum 3.5% down payment for all new purchase transactions, construction loans, and rehab loans that are not applied for as disaster relief rehab loans (the FHA 203h loan). You may be required to pay five percent down or more on some | more...

July 25, 2019

Get Ready To Buy A Home With An FHA Mortgage

By Joe Wallace

Are you ready to buy a home? If you aren’t sure, there are some ways to know what’s left to be done before actually filling out the loan paperwork. Buying a home with an FHA loan is easier with some advance preparation and planning. Set A New Budget If you haven’t made a new budget that includes a potential mortgage payment, you should look into those numbers before you apply. You need to know how much your new house payment will affect your existing budget, and don’t forget to include extra funds for maintenance and upkeep of the home. You may need to factor in the cost of minor replacement needs, and you will also need to consider the initial outlay of cash that may be required (apart from the | more...

July 18, 2019

Will FHA Mortgage Loan Interest Rates Drop Even More?

By Joe Wallace

Mortgage loan rates have been reported at historic lows in recent times and many are wondering if now is the right time to buy or refinance a home, or if it’s better to wait to see if rates sink even lower. Should you wait to refinance? Is it better to hold off on buying? There is no good answer to these questions for one reason-all home loan transactions are different, not all get offered the same interest rates, and your experience may vary. First-time home buyers should know that when you are looking for a new home to purchase with an FHA mortgage, the interest rates you see today may not be the same tomorrow, or the next day. If you are house hunting and have not found a home | more...

July 10, 2019

FHA Home Loan Down Payment Assistance

By Joe Wallace

The down payment is one of the daunting things for first-time home buyers-coming up with the cash to put the minimum required 3.5% (of the adjusted value of the home) may seem like an uphill task, but fortunately the FHA loan program guidelines permit the use of approved down payment assistance programs. These programs are not offered by the Department of Housing and Urban Development; potential borrowers will need to seek out these down payment assistance programs in their local area. The rules the FHA provides to organizations wishing to offer down payment assistance includes the requirement that down payment gifts or grants must not come with an expectation of repayment. They also include the requirement that such funds be properly sourced and transferred to the borrower. But FHA rules | more...

July 2, 2019

Preparing For An FHA Mortgage? What You Need To Know About “Contingent Liabilities”

By Bruce Reichstein

If you are preparing for a home loan and want to buy a primary residence with an FHA mortgage, you should know what the FHA loan rules are for “contingent liabilities” which involve the borrower. A contingent liability is a financial obligation that the FHA loan applicant has co-signed for in the past or is otherwise potentially responsible for should the main borrower default on the financial obligation. The FHA loan handbook defines contingent liabilities specifically as follows: “A Contingent Liability refers to a liability that may result in the obligation to repay only when a specific event occurs. For example, a contingent liability exists when an individual can be held responsible for the repayment of a debt if another legally obligated party defaults on the payment. Contingent liabilities may | more...