Articles in Category: Fixed Rate Mortgage

August 28, 2023

How Much Is Your Monthly FHA Mortgage Payment?

When you enter the planning stages for a new home loan, you’ll want to know how to budget for the expenses of your mortgage such as the appraisal fee, down payment, home inspection, etc. But you will also want to know about the monthly mortgage payment–how much it could be, how you need to adjust your personal finances to accommodate the new loan, etc. That’s why one of the most important questions a home loan applicant can ask in the planning stages is, “How much will my monthly mortgage payment be?” It’s easy to assume this is a simple calculation of how much the loan is, divided by how many months the mortgage loan payments are required. But is it REALLY that simple? The truth is that it’s more complex | more...

July 20, 2023

Home Loan Approval Questions And Answers

By Joe Wallace

What does it take to get approved for an FHA mortgage? The answers may surprise you. Did you know there are some persistent myths about the FHA home loan program that stop some people from considering it as an option? FHA Loan Myths You Should Know Some believe FHA loans are need-based mortgages, believing that only those with income below a certain level can apply. This is not true. A percentage of new borrowers sometimes believe they must be a first-time home buyer to use government-backed loan programs like FHA home loans. When it comes to some loan programs (USDA loans) this is closer to being true, but not for FHA loans. You can find programs aimed at first-time buyers. But in many cases this is for those who qualify | more...

June 23, 2023

FHA Mortgage Loan Terms: Understanding Equity

By Joe Wallace

Home equity is an important term to understand when you’re applying for any kind of mortgage loan, but for some loans, equity is a larger factor than others. For example, when you apply for a new purchase FHA loan to buy a home, you start out with 3.5% of the adjusted price of the home as your equity. That’s the amount of your down payment, and the equity grows over time with the number of payments you make. The more you pay down your FHA mortgage, the more equity you accrue. When you apply for a home equity loan, a home equity line of credit, or an FHA Home Equity Conversion Mortgage (HECM), you’re applying for a loan based on the amount of equity you have built up in the | more...

June 12, 2023

Is Summer The Best Time For House Hunting?

By Joe Wallace

When is the best time of year to search for your new home? Spring and summer are the most comfortable times to look, but those who put up with a little inconvenience from the cold and late-year inclement weather may save more than they realized thanks to a more eager seller. It always pays to look for a home when the buying season is in full swing, but you may have more options than you think by extending your house hunt into fall and winter if necessary. Buying A House During House Hunting Season (Spring and Summer) Yes, the weather is better, potential buyers can take a leisurely look around the property, and the overall experience may be more pleasant. But there is more competition for homes in the good | 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 11, 2023

How Escrow Works

By Joe Wallace

When you buy a home with an FHA loan your lender may require you to use an escrow account. This is especially relevant for those who seek One-Time Close construction mortgages, FHA 203(k) Rehabilitation loans, and any other home loan that may require an account to pay for contractors, materials, etc. FHA Reverse Mortgages also require escrow for the payment of property taxes–all Reverse Mortgage borrowers are required to stay current on property taxes as a condition of loan approval. But what is escrow and how does it work? An escrow account is basically a bank account used to hold the money you need to make a good faith deposit, property tax money, etc. The cash is deposited and held on account until the time comes to make the payments. | more...

May 9, 2023

FHA 203(k) Rehab Loan Standards

By Bruce Reichstein

FHA 203(k) rehab loan standards include a list of things that can be done with a 203(k) rehab loan and a list of ineligible projects. Borrowers should know what is allowed and what is not with these FHA rehab loans. FHA Loan Rules For Renovation, Improvements, Add-Ons In general, FHA home loan programs such as the Energy Efficient Mortgage (which can be used in conjunction with an FHA 203(k) loan) and the FHA 203(k) and FHA 203(h) rehab loan feature a list of approved uses for loan proceeds. There’s a prohibition against cash back to the borrower on these transactions except where it is needed to pay for materials and labor; even then a borrower cannot “profit” from the loan by taking excess funds in cash. FHA loan rules require | more...

May 8, 2023

Is It Smart To Apply For A Home Loan Now?

By Joe Wallace

Is now the right time to apply for a home loan? Some say no, and others may not have a choice but to start looking for a new place to live due to circumstances (new job, change in family size, etc.) and can’t afford to wait out the current market. What are these borrowers to do in an era of interest rate volatility? Mortgage Loan Interest Rates Aren’t Stabilizing Yet At press time, the financial blog headlines talk a lot about mortgage rate volatility. When rates are subject to change like this, it’s tough to predict how things might go week to week or day. A stable mortgage market is more predictable than what we’re experiencing now. After 2022, it’s not shocking that the market must experience a degree of | more...

May 5, 2023

FHA Loans: Terms and Definitions You Should Know

By Joe Wallace

Are you considering buying a home with an FHA mortgage or refinancing a current mortgage loan? If you are new to either process or if it’s been a long time since you purchased your first home, there may be terms and definitions you need to re-familiarize yourself with. Here are some basics you should know: FHA single-family home loans are what most borrowers are after when they want an FHA mortgage to purchase a home, townhome, condo, manufactured home, etc. The idea is basically that the home purchased with the FHA loan is an owner-occupied property that is primarily residential in nature and where at least one of the borrowers or co-borrowers will live once the loan is closed. Occupancy requirements refer to the FHA policy that single-family homes must | more...

April 26, 2023

FHA Loan Pre-Approval

By Bruce Reichstein

What is the difference between FHA loan approval and pre-approval for an FHA mortgage? Some borrowers get confused during the initial process because it’s easy to assume that getting through pre-approval means you’ve been fully approved for the mortgage. The reality is that pre-approval is a tool for the borrower and the lender to determine if you’re ready to buy based on your income, debt-to-income ratio levels, the amount of down payment you have saved, etc. It’s the start of the loan process, but it is not a guarantee that you have an FHA mortgage loan yet. Getting pre-approved for an FHA mortgage means using an online mortgage loan calculator or other tool to add up your income, debts, interest rate, etc. The price of the home or an estimated | more...