Articles in Category: FHA Loan Types

October 25, 2016

Interest Rate Trends: Higher

We’ve watched an overall upward trend in interest rate behavior for mortgages in recent weeks, and while there have been some days of recovery, it seems that at present there are a variety of factors putting upward pressure on rates. Market watchers have been using the phrase “the trend is not your friend” for a while now, and Monday’s rate movement showed no signs of proving that phrase wrong in the short term. Rates moved higher on Monday, not enough to push actual numbers up, but enough so that affected borrowers may notice a difference in closing costs. 30-year fixed rate conventional mortgages are still being reported at or near 3.625% (best execution), and the FHA mortgage loan interest rate range between 3.25% and 3.5% is still there (again, best | more...

October 24, 2016

Appraisal Rules For FHA Mortgages, Reverse Mortgages

By Joe Wallace

FHA home loans require an appraisal, which is designed to determine the fair market value of the home, but also to insure the property meets FHA minimum standards. While the appraisal must not be considered an inspection (and passing the appraisal is not a stamp of FHA approval or a guarantee that a home is free of problems), the FHA appraiser is required to report problem conditions may be spotted during the process. What does this mean? HUD 4000.1 states, “The Appraiser must report known environmental and safety hazards and adverse conditions that may affect the health and safety of the occupants, the ability of the property to serve as collateral, and the structural soundness of the improvements.” This is found on page 491, which also adds the following description/definition | more...

October 21, 2016

Mortgage Rate Trends: Recovering

By Joe Wallace

Mortgage rate watchers were paying close attention on Thursday to see what the European Central Bank (ECB) might announce that could influence investor behavior in markets affecting mortgage interest rates. Fears of higher rates on Thursday were out to rest (for now) thanks to the ECB’s lack of movement on tapering off the European version of quantitative easing or QE. Our sources point to this as a big reason Thursday could have been another “spoiler” day for rates in the short term. To be sure, the ECB isn’t the only thing that has the potential to affect rates, but it was the biggest thing to watch on Thursday. QE and the Fed’s handling of it was responsible for influencing many ups and downs in the U.S. a few years ago. | more...

October 19, 2016

Mortgage Interest Rates Recover Slightly

By Joe Wallace

Interest rates for mortgage loans improved in a small way for the second day after a prolonged “losing streak” that managed to push conventional loans out of a a previous range and into a single, higher number and FHA mortgage loan interest rates out of their single-number best execution territory. 30-year fixed rate conventional mortgages are, best execution, at or near 3.625%, with their previous range being (depending on the lender) between 3.5% and 3.625%. FHA mortgage loan rates are now in a range between 3.25% and 3.5% best execution at the time of this writing. Best execution rates listed here assume ideal conditions including an extremely well-qualified borrower with outstanding FICO scores and loan repayment/credit history. Your experience may vary, and best execution rates are not available to all | more...

October 17, 2016

Mortgage Loan Rates: Friday Bounce

By Joe Wallace

In our last report, we noted that mortgage loan rates had made some improvement, but the very next day we saw rates bouncing to highs not seen in several months-a move that not only affected conventional mortgages, but also served to push FHA mortgage loan interest rates out of their long-held comfort zone and into a new range. Some market watchers noted that the move higher didn’t begin until later in the day on Friday, which could have resulted in some lenders failing to change or “reprice” on that day. Depending on how things go on Monday, that could mean higher numbers for some lenders who didn’t reprice already. That means those contemplating their options when it comes to locking in a mortgage loan interest rate commitment with their lender | more...

October 14, 2016

Mortgage Rate Trends: Recovery

By Joe Wallace

After ten days of no improvement, upward pressure on interest rates finally broke on Thursday, but some market watchers are not ready to declare that day’s respite from higher numbers a decisive victory. In fact, some say this could be a resting moment before rates continue to push upward. Some industry professionals are using the word “lock” quite a bit in public statements aimed at those who haven’t yet made an interest rate lock commitment with their lenders and are within a month to two months of closing. It’s hard to argue with their logic, and rates have been low for quite some time. Is the current trend just a short term development or do we have a new range of rates to look forward to in the coming months? | more...

FHA One-Time Close Construction Loans In 2019

October 13, 2016

Second Appraisal Rules For FHA Mortgages

By Joe Wallace

There are some circumstances where a borrower may wonder about requesting a second appraisal on a property to be purchased with an FHA mortgage. For example, if the loan applicant decides to switch lenders, is a new appraisal required? What about cases where there’s a disagreement over the results of the appraisal? Many of the answers to these questions are circumstantial-it all depends on the nature of the request. Sometimes a second appraisal may be permitted IF conditions described in HUD 4000.1 exist. But in other cases a second appraisal is simply not permitted. One good example of that-a borrower or seller cannot request a second appraisal to increase the fair market value of the property. However, if “material deficiencies” are suspected in the original appraisal, the market value of | more...

October 12, 2016

Mortgage Loan Interest Rate Trends: Moving Higher

By Joe Wallace

Mortgage loan interest rates have been in a short-term trend with no improvements and/or upward movements for well over seven business days. Some market watchers believe this trend will persist a bit longer, and even though the highest rates we’ve seen in the trend are still considered low compared to previous years, it makes for a difficult choice for any borrower on the fence about locking or floating. 30-year fixed rate conventional mortgage loan interest rates are still within a range between 3.5% and 3.625%, but there are far fewer lenders offering the bottom end of that best-execution range. 3.625% is far more common, best execution. As upward pressure continues (assuming it WILL continue in the short term) we will eventually see that range disappear in favor of the higher | more...

October 10, 2016

Mortgage Loan Interest Rate Trends: Upward Trend

By Joe Wallace

For the past five business days, mortgage loan interest rates have been in an upward trend. Even after last week’s Employment Situation Report, which had weaker jobs data that anticipated, rates were still on a short-term upward swing. The employment report and mortgage loan rates aren’t directly tied together, but investor behavior associated with that report often has rates moving lower in the wake of weak jobs data. This time, investor behavior all but ignored this, and the week ended with rates closing out in a range for conventional mortgages higher than we’ve seen in a little while. 30-year fixed rate conventional mortgages closed out Friday in a range between 3.5% and 3.625% best execution. FHA mortgage loan interest rates are still holding in their 3.25% comfort zone, but if | more...

October 5, 2016

Cash To Close For FHA Loans: Some Rules

By Joe Wallace

One commonly asked question about FHA home loans involves how the lender verifies the borrower’s sources of cash to close the loan. FHA loan rules in HUD 4000.1 require the lender to verify all sources of cash to close (including your down payment) and when dealing with this requirement the first time, some loan applicants are surprised when the lender asks for specific details such as account numbers, bank statements, etc. In an age where cyber fraud, phone scams, and “phishing” for account numbers make headlines on a near-daily basis, it’s not surprising that bank customers would question a lender’s request for account numbers and other financial data. A version of a common question in this area goes like this: “My lender says she needs verify my cash reserves and | more...