Articles in Category: Fixed Rate Mortgage

February 2, 2016

FHA Loan Rules In HUD 4000.1: Inducements To Purchase (Part 2)

In our last blog post, we discussed FHA loan rules found in HUD 4000.1 on inducements to purchase and what happens if a seller or other interested third party contributes more toward closing costs or other allowed expenses than is allowed by FHA mortgage loan rules. According to HUD 4000.1, “Inducements to Purchase refer to certain expenses paid by the seller and/or another Interested Party on behalf of the Borrower and result in a dollar-for-dollar reduction to the purchase price when computing the Adjusted Value of the Property before applying the appropriate Loan-to-Value (LTV) percentage.” This information is helpful–but what constitutes an inducement to purchase? HUD 4000.1 lists them–they include but are NOT limited to the following: –contributions exceeding 6 percent of the purchase price; –contributions exceeding the origination fees, | more...

February 1, 2016

FHA Mortgage Loan Rules In HUD 4000.1: Inducements To Purchase

By Joe Wallace

There are many rules for FHA home loans that govern what buyers and sellers can and cannot do. For example, the borrower must make a minimum down payment, and the source funds from that down payment cannot come from credit card cash advances or payday loans. But there are rules for the seller (and interested third parties) as well. Did you know FHA loan rules govern what a seller can and cannot contribute towards the purchase of the property? In some cases there are contributions that are permitted but only within certain limits. From HUD 4000.1, we learn the following: “Interested Parties may contribute up to 6 percent of the sales price toward the Borrowers origination fees, other closing costs and discount points. The 6 percent limit also includes: –Interested | more...

February 1, 2016

Mortgage Rate Trends: Decisive Move Lower

By Joe Wallace

Friday saw mortgage rates moving decisively lower. Some very competitive lenders are offering best execution rates at 3.625% for 30-year fixed rate conventional mortgages according to our sources, but a more likely best execution rate on this type of home loan is around 3.75%. FHA mortgage loan rates are, best execution, still holding in the 3.5% comfort zone. But if there continues to be strong improvement in rates, or smaller amounts of improvement over a sustained period of time, we could see FHA rates break out into a range of rates with 3.5% at the upper end. Remember, best-execution rates are not available to all borrowers or from all financial institutions. Your FICO scores and other financial qualifications will be an important factor in your access to rates like these. | more...

January 29, 2016

FHA Mortgage Loan Limits For New Purchase Loans And Refinance Loans

By Joe Wallace

We’ve gotten some questions recently about FHA mortgage loan amounts, so it seemed like a good time to post the FHA loan rules found in HUD 4000.1 about how maximum loan amounts are calculated. There are FHA loan guaranty limits and FHA mortgage loan amounts–the two shouldn’t be confused as FHA mortgage loan guaranty limits refer to the amount of money the FHA will guarantee for the loan, whereas the maximum loan amount is the highest amount for a specific transaction that the lender/FHA loan rules will allow. FHA loan rules say the maximum can be affected by the type of transaction. You can find the FHA maximum guaranty amounts for your housing market at the FHA official site: https://entp.hud.gov/idapp/html/hicostlook.cfm. HUD 4000.1 says of maximum loan amounts: “A Mortgage that | more...

January 28, 2016

FHA Loan Questions: Maximum FHA Loan Amounts For Building A Home

By Joe Wallace

A reader asked us a question recently in the comments section about FHA new construction loans: “My husband and I will be building a home, we have land that we are interested in, what is the max for a construction loan and build that FHA gives?” To be clear, the FHA itself does not issue loans–the borrower must find a participating FHA lender willing to offer a new construction loan. When it comes time to determine the maximum loan amount for new construction mortgages, the FHA loan rulebook has specific instructions for the loan officer. How does the FHA instruct lenders to determine the maximum mortgage amount in these cases? According to HUD 4000.1: “The maximum mortgage amount is calculated using the appropriate purchase Loan-to- Value (LTV) percentage of the | more...

January 28, 2016

Mortgage Rate Trends: Holding Firm After Fed

By Joe Wallace

Wednesday was a potentially big day for mortgage loan rates–the Fed issued a scheduled announcement that had plenty of eyes on it even though it would seem unlikely for any major news to come from that direction since the Fed announced a hike in mortgage rates at the end of last year. But investor reaction is a funny thing, so there was plenty of attention on the Fed, seemingly “just in case”. Rates were trending a bit higher in the morning according to our sources, but after the Fed announcement we saw rates headed right back to yesterday’s territory. That means 30-year fixed rate conventional mortgages ended the day, best execution, at a range between 3.75% and 3.875%. FHA mortgage loan rates remain in the best execution comfort zone of | more...

What if my home was damaged in a natural disaster?

January 27, 2016

FHA 203(k) Rehab Loans: A Reader Question

By Joe Wallace

Recently a reader asked us a question in the comments section about using FHA loans to purchase property to be converted into a residence. “There is an old church for sale near us that we would love to buy and make into a home. Can this be done using an FHA loan? We plan on only using it for residential use. Its been hard to find a home that we love and that falls into FHA standards.” The answer to this question depends greatly on whether or not the property to be purchased is, in the eyes of the FHA, a one-to-four unit property. FHA loans include something known as a 203(k) Rehabilitation loan, which can be used to rehab, refurbish or repair an existing property. According to HUD 4000.1, | more...

January 26, 2016

Mortgage Rate Trends: Recovering Friday’s Losses

By Joe Wallace

Mortgage rates made some gains on Monday, taking back some (but not all) of the losses incurred on Friday. Stock market woes are given credit for some of the gains, but oil prices also played a role. It’s likely that as long as this up-and-down situation happens between stocks and oil, those two factors will have at least a small influence depending on the day and investor reaction to developments or breaking news in those areas. Some sources believe that as long as oil prices remain low or continue to move lower, there could be good news for mortgage rates in the short term. 30-year fixed rate conventional mortgages are in a best-execution range at the time of this writing between 3.75% and 3.85% though some may find 4.0% still | more...

January 25, 2016

Mortgage Rate Trends: Higher On Friday

By Joe Wallace

After some good improvements last week, Friday came to undo some of that progress. Earlier in the week mortgage loan rates were solidly in the high three percent zone, but after Friday’s upward turn, we see four percent back in the picture. 30-year fixed rate conventional mortgage loan rates were in a range on Friday between 3.875% and 4.0%, best execution. FHA mortgage rates are still being reported, best execution, at 3.5% but if the upward trend continues this week we could see that number shift into a range of rates with 3.5% at the low end, or we could just see FHA mortgage loan interest rates shift back into the previously long-held 3.75% (best execution). (As always, it’s important to remember that best execution rates are not available to | more...

January 22, 2016

Mortgage Rate Trends: Sideways

By Joe Wallace

Mortgage rates hit lows not seen in many months at the end of last week, and in spite of some small amount of lost ground we still see mortgage rates at sub-four percent lows at the time of this writing. Thursday saw 30-year fixed rate conventional mortgage loan interest rates staying, best execution, in a range between 3.75% and 3.875%. FHA mortgage rates are holding steady at the time of this writing at 3.5% (best execution) which is a far better comfort zone to fall into than the previously long-held 3.75%. How long FHA rates will remain here isn’t clear but the mortgage rates today held fast in spite of some market conditions that ordinarily would put upward pressure on rates. So it’s clear that there’s some potential for rates | more...