Articles in Category: FHA Loan Types

June 3, 2021

Choosing The Right Home Loan

Are you considering the purchase of a home? Among the options, you need to consider? The right kind of home loan for the right type of borrower. There are many loan programs out there with a variety of government-backed mortgages to choose from including USDA, FHA, and VA. There are also Fannie Mae and Freddie Mac loans. When exploring those home loan options, some borrowers want the lowest upfront costs possible, which makes sense when a borrower has other goals for that money, and making a down payment would hurt those plans. Some borrowers may need that money at another point, and seek out down payment assistance in the form of grants, loans, etc. One type of home loan that features a low down payment of 3% and allows down | more...

May 26, 2021

FHA Home Loan Mortgage Rates

By Bruce Reichstein

First-time borrowers sometimes ask, what is an FHA home loan mortgage rate? The FHA loan rate is the interest rate you’ll negotiate with the lender on a 15-year or 30-year FHA mortgage. There are some facts you should know about FHA loan rates that will make understanding them much easier. FHA Loan Rates: They Vary By Lender Technically speaking, the mortgage loan interest rate on your loan is something determined by the loan officer, based on current market rates and other factors. Who gets the most competitive FHA loan rates? Those who meet FICO score standards and the lender’s other financial qualifications. But rates, being negotiable, can be bought down using discount points–an option you and the participating FHA lender should discuss as early as possible. Buying discount points makes | more...

May 5, 2021

Comparing Mortgages: Conventional 97 Loans Versus FHA Home Loans

By Joe Wallace

For low down payment requirements, the FHA mortgage is a home loan that has appealed to a vast number of people. It features a down payment of only 3.5% and has many perks such as no penalty for early payoff of the mortgage. FHA home loans are government-backed mortgages, which means lower risk for the lender. That government guarantee means your lender may offer lower FICO score requirements for FHA borrowers–one major benefit of FHA home loans for some is that lower FICO score bar plus the 3.5% down payment requirement. But it isn’t the only low-downpayment home loan option; there is a conventional home loan product called the Conventional 97 with an even lower down payment of three percent. Is this a smarter option than an FHA mortgage? | more...

April 23, 2021

The FHA Home Loan Myth

By Joe Wallace

There is a prevailing myth about FHA home loans that persists to this very day–the idea that FHA mortgages are ONLY for first-time home buyers and/or the economically disadvantaged. FHA home loans are thought to be exclusively for these borrowers, but that is definitely NOT TRUE. FHA home loans are for any financially qualified borrower with FICO scores over 500 (the FHA minimum, not your lender’s minimum standard). Some confuse the FHA loan program with the USDA Single-Family home loan program, which DOES have income limits and is aimed at borrowers who are in financial need. USDA mortgages have a no money down option for qualifying borrowers but the homes purchased with these mortgages must be in USDA-approved areas and feature household income caps. FHA mortgages, on the other hand, | more...

April 19, 2021

Issues That Can Affect Your Home Loan

By Joe Wallace

There are certain problems that crop up with home loan applications that can make it difficult for a mortgage lender to approve a loan application. We have written many articles about credit scores, debt payment history, and the amount of debt you carry, and how these issues affect your ability to get home loan approval. But what about the lesser-known issues? The Nature Of The Property Counts Some property types have restrictions from either the lender or under FHA loan rules. Those rules are found in HUD 4000.1. Did you know that no mobile home built before June 15th, 1976 can be approved for an FHA mortgage? No home may be sold under the FHA loan program for commercial purposes. That means the home purchased with an FHA loan can’t | more...

April 16, 2021

Learn More About Home Loans: Appraisals & Inspections

By Bruce Reichstein

It’s important to learn as much as you can about the home loan process when planning and saving for your new mortgage. If you are a newcomer to the home loan process, there are some good resources that can help you be more informed borrower. The less informed you are, the more likely you are to have some kind of regret at the end of the home loan process. The more you know, the more confident you will feel about your choices along the way. One important issue for many borrowers is the FHA appraisal process. Are you in-the-know about what happens during the appraisal, what it is intended to do and why you should never trust the appraisal to provide you the information that only a complete home inspection | more...

April 14, 2021

FHA Home Loan Resources For First-Time Buyers

By Joe Wallace

Are you thinking of purchasing your first home? An FHA mortgage can be a great help with its low downpayment requirements, borrower-friendly terms, and the ability to freely sell or transfer ownership of the home if needed. First-time home buyers often aren’t sure where to start gathering resources for their home loans in the planning and saving stages. Here are some of those resources that can help you get started on the journey toward owning your own home. FHA Home Loan Local Down Payment Assistance Programs FHA loans permit down payment grants, and you may be able to find one in your local area using this Downpayment Grant resources list broken down by state. FHA Mortgage Loan Calculators FHA mortgage loan calculators can help you determine a rough estimate of | more...

April 13, 2021

Buy Your First Home With An FHA Mortgage

By Joe Wallace

Do you want to purchase your first home? Borrowers looking for a starter home often turn to the FHA loan program because of its low 3.5% down payment requirement for borrowers with qualifying FICO scores. And thanks to protections for the borrower such as no penalty for early payoff of the loan and the ability to refinance the FHA mortgage into a new FHA loan that can result in a lower mortgage rate or monthly payment when using an FHA Streamline Refinance loan. Qualify For An FHA Mortgage What do you need to qualify for an FHA loan? For best results, at least two years in the job market and FICO scores that are in the 600s or better. FHA loan rules say you can technically qualify for an FHA | more...

April 9, 2021

Why Loan Applications Are Denied

By Joe Wallace

What makes a borrower worthy of home loan approval? A history of on-time payments, a low debt ratio, and good credit scores all work together to get you home loan approval. But what gets you denied a mortgage? Reasons For An FHA Loan Rejection Your lender is required justify approving a home loan. There are three things the lender will review (among others): Verify that you have sufficient income for the monthly mortgage obligation; Determine that the borrower can afford existing debt and the new mortgage payments Ensure the applicant has a history of responsible credit use. What factors contribute to the lender’s decision when reviewing these three areas? We’ll explore them below. Credit Scores Matter On paper, FHA loan rules allow loan approval for borrowers with FICO scores between | more...

March 22, 2021

FHA Loan Approval: Credit Scores Are Just One Factor

By Bruce Reichstein

Some house hunters worry that they don’t have credit scores good enough to qualify for the mortgage. But it’s easy to lose sight of the fact that FICO scores are not the single determining factor in home loan approval. There Are THREE Important Factors Some FHA loan applicants come to the process knowing that both FICO scores and your record of on-time payments are crucial for loan approval. But even this is an incomplete picture of what your lender is after when trying to approve your home loan application. By this point in our article, you are likely getting the hint that there is indeed a third factor that counts when applying for a mortgage loan, and that factor is your debt-to-income ratio. The participating FHA lender’s job is to | more...