Articles in Category: FHA Loan Types

July 23, 2020

FHA Loan Limits: Where To Find Them

FHA home loans, like most government-backed mortgages except for VA loans, feature loan guaranty limits which are established by county. These are annual limits and are revised (or at least considered for revision) every year. The FHA and HUD set FHA loan limits for areas that are average-cost housing markets, but also for high-cost counties and low-cost areas. FHA loan limits vary depending on a variety of factors including the nature of the cost of local housing. States have similar FHA loan limits in most counties with an outlier here or there; other housing markets (including California and New York) may have more high-cost counties than low-cost ones. East Coast real estate markets can be notorious for this, depending on location, and the FHA loan limit rules are designed to | more...

July 8, 2020

Is Home Loan Pre-Approval Now Required?

By Bruce Reichstein

Borrowers planning to buy a home using an FHA home loan have a lot to contend with when planning and saving for the loan. But now, there is the added complication of the coronavirus outbreak, social distancing is the order of the day and many professions are struggling to do business while reducing risk of exposure to disease. One development some are watching–in addition to revised procedures for appraisals and other measures–there are reports of a trend of sellers requiring borrowers to prove they are serious about the purchase of a property before agreeing to show the home in person. Money Magazine reports this trend of having a pre-qualification requirement–why does this pre-approval issue matter in the age of COVID-19? Low mortgage interest rates have brought more home buyers and | more...

June 23, 2020

Mortgage Rates Hovering Near Historic Lows

By Bruce Reichstein

Mortgage loan interest rates have been holding steady near all-time lows. FHA mortgage loans (on fixed-rate 30 year mortgages) were reported at a best-execution 2.50% on Monday June 23, 2020 and talk persists that these low numbers could be with us longer than expected unless there are market forces that run counter to the current downward trend. Some marketwatchers point out that current low rates can be blamed at least in part on coronavirus concerns, but the reverse is not necessarily true if the crisis begins to abate without a feared second wave of infections. Investors and markets may not react in equal measure to the good economic news as they did to bad economic developments. What’s bad for the economy is often good for mortgage loan rates, and that’s | more...

June 11, 2020

Fed Announces Bond Policy Influencing Mortgage Loan Interest Rates

By Joe Wallace

In the second week of June, the Fed announced important policies that influence mortgage rates. FederalReserve.gov published a statement announcing monetary policy from the Federal Open Market Committee including: The Board of Governors of the Federal Reserve System voted unanimously to maintain the interest rate paid on required and excess reserve balances at 0.10 percent, effective June 11, 2020. As part of its policy decision, the Federal Open Market Committee voted to authorize and direct the Open Market Desk at the Federal Reserve Bank of New York to run “open market operations as necessary to maintain the federal funds rate in a target range of 0 to 1/4 percent”; The vote also authorized an “Increase the System Open Market Account holdings of Treasury securities, agency mortgage-backed securities (MBS), and agency | more...

June 10, 2020

Why FHA Loan Interest Rates Are Lower

By Joe Wallace

Have you ever started to research home loans and found yourself getting confused at all the data presented to you? What is the difference between a 30-year fixed rate conventional home loan and a 30-year fixed rate FHA mortgage? How do you know which loan to choose? Buying a home is one of the biggest commitments you can make financially as an ordinary, non-business borrower. The down payment alone makes some borrowers worry they can’t afford the loan (fortunately there may be local down payment assistance programs in your area that can help) or that they won’t be able to understand the intricacies of a mortgage. But buying a home involves a lot more common sense than you might realize. One area this is true for is interest rates–once you | more...

June 5, 2020

Mortgage Loan Interest Rates Below Three Percent

By Joe Wallace

Financial magazines reported mortgage rates falling below three percent; these reports in early June point to the numbers we’re seeing both for conventional mortgages (depending on the term of the loan) as well as government-backed loans like FHA home loans. Why have mortgage rates continued to fall to historic lows? Market volatility, daily ups and downs over COVID-19, civil unrest, and trade war concerns have contributed to these low rates. But the volatility associated with today’s mortgage loan market makes it hard to predict whether these rates will be with us tomorrow, next week, or ever again. Fortunately, borrowers and lenders use a toll called a mortgage rate lock commitment to protect the loan applicant from future changes. How does it work? When you make an offer on a home | more...

May 19, 2020

Credit Requirements For Your FHA Home Loan In 2020

By Bruce Reichstein

What do you need to know about credit requirements for an FHA mortgage? There are plenty of those who have no choice but to seek housing even in the worst of times; what should you know about credit requirements for a mortgage in the age of coronavirus? Borrowers Should Work On Their FICO Scores Earlier You can raise your credit scores by paying all bills on time, every time. You can also raise your credit scores by lowering your credit card balances below the 50% mark (30% is ideal), and by not applying for new credit on top of the credit you are already paying down. Start working on your credit as far ahead of time as you can; knowing the contents of your credit report is a GREAT start. | more...

May 15, 2020

FHA Extends Coronavirus Policies

By Joe Wallace

The Federal Housing Administration has issued a press release announcing an extension to coronavirus-related mortgage relief for American borrowers with FHA home loans. One major feature of that extension? More time on the FHA eviction and foreclosure moratorium issued on FHA mortgages. That moratorium now lasts until June 30, 2020. This applies to homeowners with “FHA-insured Title II Single Family forward and Home Equity Conversion (reverse) mortgages” according to the HUD official site. Until these measures expire, FHA lenders are directed to: Halt all new foreclosure actions; Suspend all foreclosure actions currently in process, excluding legally vacant or abandoned properties; Cease all evictions from FHA-insured Single Family properties; This excludes actions “to evict occupants of legally vacant or abandoned properties”. Also extended? The length of time for FHA’s temporary policies | more...

May 14, 2020

FHA Appraisal Rules You Should Know Today

By Bruce Reichstein

The FHA appraisal is a requirement of the home loan process; it is designed to help establish current market value of a property based on the latest property values, the overall condition of the home and property, etc. An appraisal is NOT the same as the separate, borrower-funded home inspection. Appraisals are nowhere near as in-depth as inspections and the results of the appraisal should not be mistaken for a home inspection. Appraisals are required for all forward mortgages. Recent changes to appraisal rules in 2020 in response to social distancing required by the COVID-19 novel coronavirus pandemic make the process operate differently than before temporarily. In March of 2020, the FHA and HUD issued a Mortgagee Letter announcing situational changes to the appraisal requirements that included the ability to | more...

May 8, 2020

FHA Loans, Interest Rate Cuts, And Your Mortgage

By Bruce Reichstein

Home loan interest rates have been on a wild ride. The Fed cut interest rates in March of 2020–two times in response to coronavirus economic issues. But the Fed rate cut did not mean mortgage loan interest rates were directly cut. Home loan rates move up and down based on market forces, investor behavior, etc. The Fed’s rate cut actions are not a specific trim to home loan rates, but the effects of that rate cut did include influencing how investors did business in the wake of those cuts. It’s easy to assume the Fed has some kind of direct control over home loan rates, but what is the reality? How do home loan rates work and what do you need to know moving forward with your loan application? On | more...