Articles in Category: FHA Loan Types

December 8, 2016

Mortgage Rate Trends: Lower

Mortgage rate numbers have fallen a bit since our last report. The current upward trend has seen some corrections, but Wednesday’s lower rates are inspired by overseas economic developments. Specifically, the European Central Bank(ECB) is set to make an important announcement about tapering-an issue that was a major spoiler in mortgage loan interest rates at home in years past. The ECB announcement has no direct connection to the daily FHA or conventional mortgage rate, but investor behavior often does, and that’s what happened on Wednesday. Investors are placing their money where they anticipate it will do the most good depending on whether the investor believes tapering will happen soon or not. The details of those investment strategies are unimportant for our purposes here; suffice it to say that investor behavior | more...

December 6, 2016

FHA Appraisals: A Reader Question

By Joe Wallace

“I am getting ready to purchase a home. It has been under contract for 6 weeks. 1.5 weeks out, ‘…there is concern that there may be moisture. Please have a specialist determine if there is no moisture or mold present’. My contractor that will do renovations says there is no mold present; however, ‘his word does not count because he is not a mold specialist’. Now I am 3 days from closing and a mold remediation person is $900 and a week turnaround time. What are my options?” FHA appraisals are an important part of the home buying process, and where corrections are required by the FHA appraiser, those corrections are usually ordered as a condition of loan approval. The reader question doesn’t specify if this was a correction or | more...

December 5, 2016

Mortgage Rate Trends: Higher, Then Lower

By Joe Wallace

Since our last look at mortgage loan interest rate trends, rates spiked to 24-month highs (Thursday), but then recovered on Friday. Thursday’s move took 30-year fixed rate conventional mortgage loan rates to a range between 4.25% and 4.375% (best execution). But Friday saw the same rates move back down to at or near 4.125%, best execution. On both Thursday and Friday, FHA mortgage rates remained at 4.0%, but that’s up from a previous range that still had a bottom end in the sub-four percent zone. That is gone for now, but FHA rates, best execution, haven’t been in the four percent zone in quite some time leading up to the current upward trend. Friday’s rate recovery happened in spite of job report numbers that, in times past, have served to | more...

What You Need To Know About Your FHA Home Loan

December 1, 2016

FHA Loan Applications in 2017: Are You Ready?

By Joe Wallace

For potential borrowers thinking of filling out FHA loan applications in 2017, there are a number of areas to think about as you prepare. Some potential borrowers are ahead of the curve when it comes to getting financially ready for a major loan application, while others may overlook important areas that need attention long before the loan paperwork is filled out. Do you know how ready you are to fill out that mortgage loan application? One question to ask yourself before the new year arrives is how long youve been planning and preparing for the new loan. Many financial experts advise taking at least a full year to save, budget and research the new loan. Why is research needed? In several ways, doing some research can help you decide what | more...

November 30, 2016

Mortgage Rate Trends: Slightly Higher

By Joe Wallace

Were giving additional time for mortgage rate trends this week in light of the sharply higher movement and attempts at recovery weve seen in recent days. Since our last report, mortgage rates have moved higher once more, but overall the best execution numbers are roughly about in the same range as mentioned in our last report. There are a variety of reasons for Wednesdays upward turn for rates. One factor is overseas economic news related to the OPEC deal, which in and of itself might serve to put some upward pressure on rates depending on investor reaction to those developments. However, the OPEC situation combined with domestic inflation fears related to the incoming President and his administration serves to dump more fuel on the fire. These two factors are cited | more...

Will My Home Loan Application Be Approved?

November 30, 2016

2017 Home Loans: Is Your Holiday Spending A Factor For An FHA Loan?

By Joe Wallace

Holiday credit card use tends to spike, and those considering 2017 home loans should take this into account when planning for a new mortgage loan application. Your credit card debt affects your debt-to-income ratio, which the lender will calculate at application time. That ratio, called DTI for short, is a very important factor in home loan approval. For some borrowers, the amount of credit card debt, even holiday spending, isnt as much of a problem as timely payments. Some consumers are tempted at holiday time to skip payments in order to free up some much-needed cash, but a missed payment within 12 months of your FHA mortgage or refinance loan application is not a good thing. Financial experts recommend borrowers maintain on-time payments with no late or missed payments for | more...

November 29, 2016

Mortgage Rates: Recovering

By Joe Wallace

Since our last report on mortgage loan interest rate trends, we saw 30-year fixed rate conventional mortgage rates hit 4.25% best execution (depending on the lender). That was something of a milestone in 2016 after many, many months of sub-four percent mortgage rates. But since that time, rates have recovered some lost ground and while the current best execution rates are still above the four percent mark, any news of lower rates at this point is welcome. 30-year fixed rate conventional mortgages are, at the time of this writing, reported at a best execution range between 4.125% and 4.25% depending on the lender. FHA mortgage loan rates are still within a range between 3.75% and 4.0%, best execution. As we always point out, the rates seen here are listed assuming | more...

How much can I borrow with an FHA refinance loan?

November 29, 2016

FHA Loans Closing Checklist

By Joe Wallace

Borrowers who buy a home with an FHA loans or any other type of home loan, learn that their closing dates and other details become very important the closer the borrower comes to signing on the dotted line and taking possession of the home. To help borrowers manage all the details about closing, federal law requires the loan officer to provide a closing disclosure that details expenses, fees, and other information. The government’s watchdog agency, the Consumer Financial Protection Bureau (CFPB) at ConsumerFinance.gov says of this disclosure, “Lenders are required to provide your Closing Disclosure three business days before your scheduled closing. Use these days wisely”. The three day period before you close should be used to review your closing details-use it like a closing checklist to make sure everything | more...

November 28, 2016

The Debt To Income Ratio: FHA Rules In 2017

By Joe Wallace

If you are thinking about your FHA loan options in 2017, one area to pay special attention to (especially over the holidays) is your debt to income ratio (DTI). This ratio is one of the most important factors in the lender’s decision to approve or deny a home loan-it can be just as crucial as your FICO scores. The debt to income ratio is a calculation your lender will make by taking the amount of verifiable income you have and comparing it with the amount of your monthly financial obligations. This ratio is calculated with and without your proposed mortgage payment in order to determine if you can afford the loan payments every month. How does the lender make these calculations? According to HUD 4000.1, pages 177 and 178: “The | more...

November 25, 2016

203(k) Rehab Loans In 2017: Maximum Mortgage Amounts

By Joe Wallace

FHA 203(k) rehab loans and 203(k) refinance loans in 2017 will help qualified borrowers buy and improve property in need of repairs, renovation, etc. The FHA 203(k) rehab loan program allows a borrower to fill out an application purchase a “fixer-upper” or improve a property. Here’s what the FHA official site says about this type of FHA mortgage: “Section 203(k) insurance enables homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgageor to finance the rehabilitation of their existing home.” There’s both a standard 203(k) and a limited FHA 203(k) loan for smaller projects. But how does the lender calculate the amount of the 203(k) mortgage or refinance loan? HUD 4000.1 addresses how the maximum mortgage amount | more...