Articles in Category: FHA Loan Types

September 11, 2023

Things You Can Do With An FHA Mortgage

What can you buy with an FHA mortgage? First-time home buyers and experienced home buyers who have never used an FHA mortgage sometimes wonder whether they can use an FHA loan to buy certain property types. We examine some of these issues below. Remember that state law, local ordinances, and FHA loan rules may change over time, it’s best to reexamine the rules before you start your house-hunting phase of the journey. Use An FHA Loan To Buy A Multi-Unit House One permitted use of an FHA home loan program is buying a multi-unit property. You can use an FHA mortgage to buy a house with as many as four living units. Use An FHA Loan To Buy A Multi-Unit Rental Property This is allowed by FHA loan rules. The | more...

September 8, 2023

Buying A Home With A Refinance Strategy

By Joe Wallace

For some, buying a home in 2023 is a bad idea. At least, that is the impression some get when looking at today’s high interest rates in the third quarter of the year. Some compare these numbers to the rates available a year or two ago and wonder why they should consider buying a house in today’s market. Saying no to an FHA home loan in these circumstances could be the right answer for those without a refinance strategy to help them get out of today’s higher rates as soon as lower interest rates are offered consistently. But what about those who think long-term and have a strategy to refinance their home loan as soon as it’s feasible? FHA Loans And Housing Market Competition Major news outlets reported mortgage loan | 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...

September 1, 2023

How Much Should I Save For My FHA Loan Down Payment?

By Joe Wallace

How much money should a home buyer save for a down payment? The answer can’t be given in dollars and cents because the amount of your down payment depends on the purchase price of the home in part, you’ll need to know the sale price before you can calculate the down payment amount. The percentage of the down payment (based on the price of the home) depends on the type of home loan you want, whether you want to avoid mortgage insurance, and whether your FICO scores are high enough to qualify for the lowest down payment. Some down payment percentages are higher than others for various reasons including risk to the lender in some cases. Down Payments For VA Mortgages VA loans offer a no-money-down option, but there is a | more...

August 31, 2023

FHA Home Loan Rules And Fair Housing Laws

By Bruce Reichstein

We report on Fair Housing cases from time to time, a reminder to those looking for housing that there are federal laws that protect against discrimination in housing. But what are the FHA home loan rules in this area? Did you know that the FHA loan program has specific instructions to the lender regarding Fair Housing laws? Those instructions are found in HUD 4000.1, the FHA Single-Family Home Loan Handbook. Page 120 of that handbook instructs the lender, “The Mortgagee is required to comply with all federal, state and local laws, rules, and requirements applicable to the mortgage transaction, including all applicable disclosure requirements and the requirements of the Consumer Financial Protection Bureau (CFPB), including those related to: The Fair Housing Act protects both renters and home loan applicants looking | more...

August 28, 2023

How Much Is Your Monthly FHA Mortgage Payment?

By Joe Wallace

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...

August 24, 2023

When It’s Time To Close Your FHA Loan

By Joe Wallace

First-time home buyers and those who haven’t purchased real estate in a while can greatly benefit from using a closing checklist. The Consumer Financial Protection Bureau (CFPB) offers a sample closing checklist you can use to help you remember the essential details you’ll need to address on closing day. It’s easy to overlook an important detail or two as you approach closing day. There is a lot to remember! As the CFPB reminds, a closing checklist can help you keep all those details in one place to keep all your obligations for closing day centralized and at your fingertips. First Things First Your closing checklist should tell you who’s conducting your closing procedure, where that process should happen, and when it is scheduled. How much do you need to pay | more...

August 4, 2023

FHA Loan FICO Score Requirements

By Joe Wallace

“Is my credit score good enough to get a mortgage?” That is among the most common questions about FHA loans and it’s easy to understand why. In times of high interest rates and competitive housing markets, every advantage counts. Do borrowers with lower credit scores still have a shot at getting a home loan? FHA loan rules for single-family home loans technically permit FHA loan approval for borrowers with FICO scores above 500. If your credit scores are within the 500-579 range you may be asked to make a higher down payment. But if your FICO scores are 580 or higher you qualify by FHA standards for the lowest 3.5% down payment. Here is the official FHA loan FICO score table from the FHA official site which lists the FICO | more...

July 28, 2023

FHA Rehab Loans Versus FHA 203(b) Loans

By Bruce Reichstein

When shopping for real estate, most borrowers are thinking of the kind of mortgage such as the one known as an FHA 203(b). That’s the loan you want when shopping for a house you want to buy as-is; one that meets FHA appraisal standards and requires little to no work on the property to make it eligible for a 203(b) forward mortgage. Then there is another type of home loan option available to FHA borrowers; the FHA 203(k) rehabilitation mortgage, which allows you to buy a fixer-upper and have it brought up to FHA appraisal standards and local code requirements. The FHA 203(k) rehab loan is suitable for both new purchase and refinance applications. Regardless of whether you buy or refinance with an FHA Rehab Loan, you are permitted to | 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...