February 23, 2011
FHA home loans differ from conventional loans in many ways. One of those differences is the amount of down payment required to purchase a home with an FHA insured loan. FHA loans, like their conventional counterparts, do not have a fixed dollar amount required as a down payment. Instead, a percentage of the loan amount is calculated, based on the sale price of the property.
February 9, 2011
Buying a home with an FHA loan involves a process with a set of milestones along the way. The first of set of milestones includes finding a suitable home, negotiating a price, applying and being approved for a home loan and agreeing to the terms and conditions. When it's finally time to close the deal, sign on the dotted line and get ready to take possession of the property, there's another important part of the process--getting a HUD-1 Settlement Statement.
February 1, 2011
The Real Estate Settlement Procedures Act or RESPA was created to protect FHA loan applicants and other borrowers. RESPA requires, among many other things, full disclosure to the buyer with regard to actual costs, obligations and other details of a home loan. RESPA prevents "gotcha" sales tactics in the real estate industry and makes the borrower and home purchasing experience more fair for everyone involved.
January 31, 2011
Buying a home with an FHA mortgage is very similar to purchasing a home with a conventional loan in many ways. Once the loan application itself has been approved and it's time to make an offer, buyer and seller interact with one another the same as with any other real estate purchase. First time home buyers with an FHA insured home loan may not know what to expect or what's expected of them at this stage in the process, but the steps are very simple. When the buyer decides that a property is the one for them, they may make an offer to the seller. As long as the offer is not submitted in writing as a binding agreement, there's plenty of room to negotiate but it's important for FHA | more...
December 29, 2010
Most FHA home loan programs require the borrower to make a minimum down payment of 3.5% of either the appraised value of the property or the asking price of the home, whichever is lower. The downpayment is strictly regulated. The buyer is not only required to put down his or her 3.5%, but the FHA also requires documentation on the source of the down payment money in many cases. Documentation is required when the borrower pays more than 2% of the sale price. It's also required in any situation where the lender has certain questions about the down payment. According to FHA requirements, documentation is needed when the down payment "appears excessive based upon the borrower
December 28, 2010
Every home loan comes with associated fees, whether it's an FHA mortgage or conventional home loan. Knowing the fees up front can help house hunters budget for the ones they must pay up front and understand which ones can be rolled into the amount of the loan when permitted by FHA regulations. FHA loan fees include the loan origination fee, which includes the administrative cost of doing business with your chosen lender. There are also title search and examination fees and legal fees which must be paid.
December 22, 2010
In our last post we discussed the cost and process of FHA appraisals. Since the FHA appraisal is such an important part of the FHA mortgage process--the loan amount can't be established without the appraisal--it's good to know how and why the process works the way it does. One of the key aspects of getting a fair, accurate estimate of the reasonable market value of a home is the independence of the appraiser. How does the first time FHA borrower know the FHA-approved appraiser is assigning value to the home for sale that's actually consistent with market practices rather than helping the lender raise the FHA loan amount by over-valuing the property?
December 22, 2010
Part of the FHA home loan process is establishing the reasonable value of the home for sale. The reasonable value is not necessarily the asking price, but rather the estimated market value of the property based on the work of a licensed, FHA-approved appraiser. The appraisal is a crucial part of the FHA loan process; without it, the loan can't move forward. The FHA will not insure or guaranty a loan amount for more than the reasonable market value of the property (with approved extra costs such as energy-efficient upgrades and other items approved by the FHA to be included in the FHA loan amount).
December 20, 2010
How much do I need to make to qualify for an FHA mortgage? That is among the most popular questions about FHA home loans. According to the FHA, there is NO minimum income requirement to apply. That said, the FHA does require a three-year employment record showing steady income during that time. Note that the requirements don't say you must have held the same job for three years, only that the income has been reliable. The fact is, in order to qualify for an FHA home loan, there is no one single determining factor that gets you approved or declined; the FHA examines a combination of factors to determine an applicant's overall credit worthiness and ability to pay the FHA mortgage on time every month.
December 17, 2010
he HUD-1 Settlement Statement is a document used to show buyers and sellers the full financial details of the transaction for the purpose to documenting who has paid or agreed to pay what costs, adjustments, etc. It also shows how much money the buyer needs to bring to the transaction up front in order to close the deal. The first page of the Settlement Statement provides the buyer with a list of all costs and related figures for both buyer and and seller. The area called Section J is for the FHA borrower while Section K lists the seller's part of the deal. Buyers are required to get Section J but they may not necessarily be furnished a copy of Section K, the seller's portion.