Articles in Category: FHA Loan Types

February 15, 2023

FHA Fixed-Rate Mortgages Versus Adjustable Rate Mortgages

What’s the difference between a fixed-rate mortgage and an adjustable-rate home loan? In 2023, you may find advantages in both types thanks to inflation and a recovering housing market. FHA single-family home loans come in a variety of types; both fixed-rate loans and those with adjustable rates. The rules for these loans, commonly referred to as FHA ARM loans, are spelled out in HUD 4000.1, the FHA Lender’s Handbook. Fixed rate home loans backed by the FHA are essentially what their name implies; a mortgage with a rate negotiated between the borrower and lender that does not change for the entire loan term. Borrowers who later want to apply for a lower rate can apply for FHA refinancing, including options such as the FHA Streamline Refinance loan program for FHA-to-FHA | more...

February 1, 2023

FHA Home Loan Myths Explained

By Bruce Reichstein

There are plenty of myths about FHA home loans. For example, some people STILL believe the FHA home loan program is a need-based mortgage loan offered only to low-income house hunters. This is not true–any financially qualified borrower can apply for an FHA mortgage. There are no income caps or need-based requirements for FHA loan approval. But that’s just the tip of the iceberg. FHA home loans can be used to buy certain property types including condo units and mobile homes. FHA home loans can even be used to have a house built on your own land with a low 3.5% down payment. FHA Loan Myths: First-Time Home Buyers You do NOT have to be a first-time homebuyer to qualify for an FHA mortgage. You can be an experienced homeowner, | more...

Conventional Loan Interest Rates Make History, FHA Loan Rates Still Incredibly Low

January 25, 2023

Are You Ready For An FHA Loan Application?

By Bruce Reichstein

Are you ready for an FHA mortgage loan? Buying or refinancing a home with an FHA loan takes planning and preparation, but once you’ve put the time in and gather your information, budget for expenses, and check your credit, the process will be far more understandable and accessible. Are You Ready For An FHA Mortgage Loan Application? You may be ready to fill out your FHA mortgage loan or refinance loan application if you have spent the last year reviewing your credit reports, working on reducing your debt-to-income ratio, and have made sure to have 12 months of on-time payments on ALL financial responsibilities. You are ready to apply if you know what kind of home loan you need and how it will be used. For example, are you interested | more...

January 10, 2023

Rent Or Buy? FHA Loans Can Help You Own Your Home

By Joe Wallace

Is it wiser to rent or to buy your home? For some borrowers, it makes more sense to make a mortgage payment than to commit to a monthly rental payment. These borrowers should definitely explore their FHA home loan options and compare the cost of renting to the costs of owning. FHA Loans Can Help You To Stop Paying Rent Buying your home with an FHA mortgage means no more waiting for the landlord to repair crucial areas of the home. Homeowners are free to schedule or make their own repairs or upgrades without having to wait for someone else to get around to scheduling those necessary appointments. Buying a home with an FHA mortgage means no more apartment hunting, paying application fees or security deposits, etc. FHA Mortgage Loans | more...

December 28, 2022

Buying A Home In 2023

By Joe Wallace

Are you making plans to buy a home with an FHA mortgage in the new year? Your timing might be better than you think; housing markets are cooling which may lead (over time) to lower prices, decreased demand for houses on the market, and more negotiating power for the buyer. But there are a few important questions. How long does the market improve before we see conditions begin to level off? There is no way to predict what might happen going forward, and it’s important to compare and ask lenders about what rates might do in the months leading up to your FHA loan application in 2023. It is unrealistic to expect your lender to be a fortune teller, nobody knows when home loan interest rates might recover closer to | more...

December 21, 2022

New Mortgage Rules And Your FHA Home Loan

By Joe Wallace

The Consumer Financial Protection Bureau (CFPB) has weighed in on certain mortgage lending practices with an eye on reform; in 2022 it moved to require lenders to enhance loan approval policies related to a type of mortgage known as bank statement lending. These are loans include rules that allow the lender to review the borrower’s bank statements as a source of income for the borrower. Bank statement mortgage loans are, according to the publication National Mortgage News, offered to about 100 thousand borrowers per year, worth up to $25 billion in loans. In October of 2022, CFPB revised its regulations for these mortgages. Lenders are now required by the CFPB to confirm the data on bank statements used to verify income. Specifically, the lender is required to determine that the | more...

December 12, 2022

Housing Market And Home Equity: What You Need To Know In 2023

By Joe Wallace

The mortgage industry has been coming down from the highs of summer, 2022. Fed actions to raise interest rates had an effect on the housing market (indirectly–the Fed sets the rates on federal loan funds, not mortgage loan interest rates) and as a result, conditions have started to cool to the point where mortgage rates actually dropped in December. Slowing Demand As the housing market cools, a course correction for home equity is an important factor to think about. According to certain mortgage industry sources, there are plenty of indicators that home equity is indeed starting to come back down. Lower demand and lower prices can translate into lower equity. Consider what the publication Mortgage Industry News printed about a report by CoreLogic in 2022: By the end of the | more...

December 7, 2022

Mandatory or Optional? FHA Home Loan Issues

By Joe Wallace

What is mandatory and what is optional when you apply for an FHA home loan? You will find a lot of advice on the internet about buying a home. You can haggle over the home sale price, for example, and negotiate things like seller concessions. But what about the not-so-obvious details? What is required and what is not? Mortgage insurance on your FHA mortgage, for example, is mandatory. To a point. All FHA forward mortgages (also known as purchase loans) require you to pay for mortgage insurance on your FHA home loan each month. That said, it may not be mandatory for the full duration of the mortgage. That may depend on how much you put down and the term of the loan you may have the option to cancel | more...

November 18, 2022

Buying A Home With An FHA Loan In 2023

By Joe Wallace

The last weeks of the old year usually bring speculation about what the next year will bring, especially in terms of the economy and the real estate market. Housing market issues were a serious concern in 2022. In the wake of this year’s rising mortgage rates and house prices; what are finance blogs and market watchers saying about what’s next in 2023? Many finance websites report a general expectation that rates and house prices may improve in the new year. But the degree of that improvement is what’s at issue. Some feel big changes are coming (compared to current conditions) while others feel those gains could be more modest. The National Association of Realtors are on record saying 2023 may see mortgage rates hover between 6% and 7%. There will | more...

November 3, 2022

Do You Need A Co-Signer For An FHA Mortgage?

By Joe Wallace

Some house hunters are worried they may not be able to qualify for a home loan on their own and feel the need to add a co-signer. Other borrowers are buying a home with someone else (often significant others or spouses) and need to have more than one name on the mortgage. FHA home loans (yes, refi loans too) allow one borrower or multiple borrowers. The key to understanding how loan approval works for an FHA mortgage is to remember that all parties to be obligated on the mortgage loan must be able to financially qualify. FHA Borrowers And Co-Borrowers FHA loan rules instruct the lender that to be considered eligible for an FHA home loan or refinance loan, “…all occupying and non-occupying Borrowers and co-Borrowers must take title to | more...