Articles in Category: FHA Loan Types

November 25, 2016

FHA Appraisal Fees in 2017

If you are considering an FHA home loan in 2017, the FHA appraisal fees and other appraisal issues are likely something you’ll be thinking about soon. Planning and budgeting for a home loan includes anticipating FHA appraisal fees, hazard insurance, and required closing costs that won’t be included in the loan amount. Do you know how much to save up for such expenses? We get many questions about FHA appraisals in our comments section. One common question has to do with the specific amount of the fee and how such fees are determined. We are also asked about refunds of the appraisal cost if the home is ultimately declared unsuitable for an FHA mortgage, or if the borrower chooses not to purchase the property for some reason. The key to | more...

November 24, 2016

Happy Thanksgiving 2016

By Joe Wallace

Happy Thanksgiving! We pause from our usual schedule of writing about FHA home loans and answering reader questions to observe the holiday. Thank you very much for reading! Our regular schedule returns on Friday.

November 23, 2016

FHA 203 (k) Loans in 2017: What To Expect

By Joe Wallace

Are you considering an FHA 203(k) rehab loan or refinance loan in 2017? There are rules for this fixer upper loan (and its refinance loan counterpart) you should know going into the process. For starters, when a borrower is applying for an FHA 203(k) loan, the lender is required to use a 203(k) consultant. According to HUD 4000.1, “The Mortgagee must select an FHA-approved 203(k) Consultant from the FHA 203(k) Consultant Roster in FHAC…The Consultant must inspect the Property and prepare the Work Write-Up and Cost Estimate.” This section of the loan rules adds definitions for the terms mentioned above. “The Work Write-Up refers to the report prepared by a 203(k) Consultant that identifies each Work Item to be performed and the specifications for completion of the repair. Cost Estimate | more...

November 23, 2016

FHA 203(k) Loan Rules: A Reader Question

By Joe Wallace

A reader asks, “I’m attempting to buy a mixed use residential/commercial property through an FHA 203(k) loan, and the building meets the size requirements. The commercial section is drywalled and spackled with plywood flooring. The residential section is in compliance, but the FHA appraiser listed a bunch of things needed in the commercial section, like a washroom, finished flooring, and baseboard.” “Where did they come up with this list? Is this a requirement for getting the loan? Ill have to make the seller do these things before the sale since I cant do any 203k work on the commercial section, so how do I know what is expected in the commercial section? The HUD doc says nothing on this.” FHA 203(k) loans are also known as “fixer-upper” loans, but even | more...

November 22, 2016

Mortgage Rate Trends: Pushing Higher

By Joe Wallace

Since our last report on mortgage rates, we’ve seen rates climb to highs not seen in well over a year. The markets that influence mortgage loan interest rates are reacting to economic uncertainty-specifically the unknowns related to fiscal policy for the incoming administration in Washington. Markets don’t like uncertainty, and current investor behavior is putting upward pressure on mortgage rates overall. 30-year fixed rate conventional mortgages are, at the time of this writing, reported at a best execution range between 4% and 4.125%. FHA mortgage rates are in their own best execution range between 3.75% and 4%. We haven’t seen rates break into the four percent zone in a very long time, and market watchers speculate that it will take a big dramatic shift to get back into the three | more...

How much can I borrow with an FHA refinance loan?

November 21, 2016

Getting An FHA Loan In 2017

By Joe Wallace

Are you considering an FHA loan in 2017? There are several things that can help you on your journey to home ownership in the new year. The first is knowing that the FHA updates its list of loan limits every year-at the time of this writing the FHA loan limits are not available yet for 2017, but new limits will go into effect on January 1, 2017. That means that some limits may change depending on the housing markets; sometimes low-cost and/or high-cost areas get an adjustment for the new year, other areas may also be affected depending on the state of the market. The FHA loan limits for each new year are adjusted based on averages for each individual market. From the FHA official site: “FHA publishes updated limits | more...

November 18, 2016

FHA Appraisal Rules: A Reader Question

By Joe Wallace

A reader asks, “Does the ‘no exposed wiring’ rule apply to an unfinished utility closet that has the furnace and water heater inside it? This is merely a smaller utility closet space that was never finished as it was never meant for any type of living area.” FHA loan appraisal rules in HUD 4000.1 include a set of instructions for the appraisal. Those instructions include a section that specifically addresses the electrical system of the home. In general this section tells the lender and appraiser about defective conditions which must be reported, including a variety of issues such as an electrical system that is not adequate to support the entire property. Those instructions also include the following: “The Appraiser must examine the electrical system to ensure that there is no | more...

November 16, 2016

Mortgage Loan Interest Rate Trends: Sharply Higher

By Joe Wallace

Since the election, mortgage rates have been on the move, and this week has seen a sharp increase in rates that we haven’t experienced in some time. In fact, rates are the highest they’ve been all year. It’s unclear at this point whether this is a short term reaction to current events, or if this indicates a longer-term trend. 30-year fixed rate conventional mortgages did something they haven’t done in a very long time-they broke into the four percent range, with a best execution 4.0% for the most well-qualified borrowers. Rates have flirted with the bottom end of the four percent range in the recent past, but managed to stay below four percent for a very respectable length of time. FHA mortgage loan interest rates are now at a best-execution | more...

FHA Loans And Natural Disasters: What You Should Know

November 15, 2016

FHA Loans And Debt: A Student Loan Question

By Joe Wallace

A reader asks, “I am a mother who is on a fixed income of $1600.00 a month in ft laud. my son is going to be the co borrower who lives and works in LA. Makes a good salary. We already got pre-qualified up to 300k, our credit score is above 680…question is my son has student loan of 33k and is in forbearance until next year. Will this be a problem with (an) FHA loan?” FHA loan rules in HUD 4000.1 instruct the lender on how to view debt, debt ratios, and the kinds of debt known as “deferred obligations” which may not affect the borrower’s debt to income ratio in the short term, but can do so after a home loan has closed. Sometimes, FHA loan approval may | more...

November 11, 2016

Mortgage Rate Trends: Sharply Higher Post-Election

By Joe Wallace

Mortgage loan interest rates are not tied to election results. However, investor reaction to major events that have economic implications-and the 2016 Presidential election is definitely one of those-can and often does result in changes in mortgage loan rates. We won’t speculate or editorialize on the outcome of the 2016 election, that’s beyond the scope of this report. However, in the wake of election night, we have seen markets react sharply to both the results and the aftermath. On election night alone, the Dow fell dramatically after hours, with recovery the next day. This is a common knee-jerk reaction in the marketplace under such circumstances. What’s important for borrowers to know? At the moment we are in an upward trend for mortgage loan interest rates. Investor reaction to the election | more...