Articles in Category: FHA Loan Types

October 20, 2023

FHA Refinance Loans For Home Improvements

FHA refinance loan options include the ability to apply for a refi loan to do home improvements–a very important option for those with existing FHA mortgages or non-FHA loans alike. That said, home loan interest rates are higher than they’ve been in a while at publication time and many think refinancing today isn’t a great option. But what about when interest rates and the economy in general begin to improve? You may not be considering a refinance loan today, but when mortgage rates begin to fall, the option becomes more viable for many. How can FHA refinance loans help a borrower make upgrades or improvements when the time is right? There’s more than one way to approach the refinance loan question if you want a refi AND funds to perform | more...

October 17, 2023

FHA Loan Down Payment Concerns

By Joe Wallace

Looking for a home to buy with an FHA mortgage? Planning and saving for the down payment or planning to have one provided for you (using approved sources ) is a big part of the early stages of your home loan process. You aren’t alone in this journey. You may qualify for help from a local down payment assistance program that meets FHA standards. You can also get down payment gift funds from friends and family. Accept a down payment gift before your closing date, and you have some steps to take before you pay the money. FHA loan rules, like many other home loan programs, have rules that govern the down payment. FHA Down Payments Are Regulated Your down payment is regulated by federal law to prevent a lender | more...

October 16, 2023

What To Know About Changing Mortgage Loan Interest Rates

By Joe Wallace

In October 2023, fixed-rate mortgage rates spiked to what CNBC called “the highest level” since the year 2000. But adjustable rate mortgages did not follow suit. Instead, ARM loan rates fell. You might be wondering why. CNBC reported the higher fixed rate mortgages caused more people to explore ARM loan options. Increased demand seems to have made ARM applications go up. and demand fell from an average of 6.49% down to an estimated 6.33%. Adjustable Rate Mortgages, Fixed Rate Mortgages Adjustable rate mortgages offer lower introductory rates. Once the intro rate expires these loans feature rate adjustment periods. The lower rate makes it potentially cheaper to buy a home. At least until the rate adjustments begin. Future-minded borrowers should consider applying for ARM loans with an exit strategy to deal | more...

October 6, 2023

Buying A Home In A Difficult Housing Market

By Joe Wallace

Do you plan to buy a home in 2024? If you are currently planning and saving for your loan, you likely have seen headlines predicting a tough market in the coming months. According to a 2023 article published by CNBC, home prices are expected to keep rising in 2024. Those are observations based on real estate forecasts from the National Association of Realtors and federal agencies. What should you know about buying a home as we head into 2024? In some cases it may be a simple matter of adding extra time into your home loan process for planning and saving. For others, it may be a matter of choosing the right type of mortgage loan. For example, instead of competing for a limited inventory of existing homes, some applicants | more...

October 5, 2023

FHA Loans, Bank Accounts, And Verifiable Income

By Joe Wallace

Some FHA borrowers want to know if they can use a business bank account for verifiable income purposes when applying for an FHA mortgage. Unfortunately, this question is open-ended, and the answers depend on circumstances. These issues are typically handled on a case-by-case basis. Does the business bank account belong to the borrower because he or she is a freelancer or self-employed? Is this an expense account that belongs to an employer? Such situations may have different issues affecting whether funds deposited to this account may be used as verifiable income. Those who are self-employed must provide documentation, including tax records and other paperwork that demonstrate that the income from the business is reliable and likely to continue. Freelance or contract employees would likewise be required to provide evidence that | more...

October 3, 2023

How FHA Loans Differ From Other Government-Backed Mortgages

By Joe Wallace

There are several government-backed mortgage loan programs including FHA mortgage loans, VA loans, and USDA mortgages. What makes FHA mortgages different than VA or USDA home loans? How FHA Home Loans Work The FHA does not lend money to borrowers. Instead, it allows third party lenders who meet FHA standards to underwrite and process FHA mortgage loans, which have a percentage of the mortgage guaranteed by the government. That makes the potential losses to the lender lower should a borrower default on the mortgage. FHA home loans have lower credit score requirements, feature lower required down payments, and have borrower-friendly rules such as a requirement that there be no financial penalty for early payoff of the mortgage. FHA loans are backed by the government, making them a better deal for | more...

September 19, 2023

How Much FHA Loan Do You Need?

By Joe Wallace

How much can you borrow with an FHA mortgage? If you are looking at FHA loan limits as a new home buyer, it’s easy to assume those numbers represent the total amount that the lender will offer once the loan application is approved. But should you expect to borrow that maximum loan amount? FHA Loan Limits 101 FHA loan limits vary. They are not identical for all housing markets or housing sizes. There is a maximum loan amount for high-cost counties, FHA loan limits are higher for multi-unit homes, and there is a lower FHA loan limit in areas that don’t cost as much as the most expensive housing markets. What To Know About FHA Loan Limits FHA loan limits have a maximum or “ceiling” for high-cost housing markets and | more...

September 15, 2023

What You Should Know About FHA Energy Efficient Mortgages

By Bruce Reichstein

The FHA Energy Efficient Mortgage (EEM) loan program was started back in 1992 as a pilot program in five states. A few years later, the program was expanded nationwide. According to the FHA official site: “EEM is one of many FHA programs that insure mortgage loans–and thus encourage lenders to make mortgage credit available to borrowers who would not otherwise qualify for conventional loans on affordable terms (such as first-time homebuyers) and to residents of disadvantaged neighborhoods (where mortgages may be hard to get).” Borrowers who use FHA loans can add the required FHA upfront mortgage insurance premium to their home loan or pay in cash at closing. There is a monthly premium paid as part of the monthly mortgage payment. The FHA EEM is an add-on to a standard | more...

September 13, 2023

Tips You Should Know About FHA Loan Down Payments

By Joe Wallace

Down payment issues may vary depending on the home loan you select, whether it is an FHA loan, a VA mortgage, or a USDA construction loan, but some things are common for all mortgages where down payment money goes. Do You Need A Down Payment Gift? Get It In Writing A participating FHA lender can accept down payment gift funds from a variety of sources. The money can come from family, friends, and employers. But these gift-givers must also provide a letter detailing where the cash comes from and that it does not come from unapproved sources, which we will explore below. The down payment gift letter must explain where the money is from, such as cash saved at home, investments that have been cashed in for the gift, or | more...

September 12, 2023

Do You Want To Buy A House This Year?

By Joe Wallace

Do you want to buy a house this year? There is still time in 2023 to take advantage of the lower FHA loan limits set at the beginning of the new year. There are also things you should do to prepare for the loan, and it’s a very good idea to give yourself extra time to get it all done. It’s best to come to the application process with the following steps already accomplished. Check Your Credit Report Start reviewing your FICO scores and details to make sure there are no errors, identity theft, outdated information, etc. You are legally entitled to a free credit report. Contact Experian, Equifax, and TransUnion to learn more about contesting errors or other issues on your credit reports. Use A Mortgage Calculator An online | more...