Articles in Category: FHA Loan Basics

July 17, 2017

What Is A One-Time Close FHA Construction Loan?

The FHA single family loan handbook tells us that FHA home loans are for a variety of different types of purchases including existing construction, “new construction” which means a home recently built but never occupied by an owner, and “proposed construction” loans which allows the buyer to apply for a loan to fund both the construction phase and the “permanent” phase of the mortgage. How do FHA construction loans differ from new purchase loans? Aside from the obvious (new purchase loans for existing construction move faster than construction loans do thanks to the lack of a construction phase for the existing construction loan) there are some important considerations to think about when contemplating your construction loan options. Is An FHA Construction Loan Right For Me? If you need to get into | more...

July 13, 2017

How Do You Apply For An FHA Loan? What You Need To Get Started

By Joe Wallace

How Do You Apply For An FHA Loan? In our last blog post we covered some basics about preparing to apply. You can’t get to the application process without saving up for closing costs, examining your credit, and making sure you come to the application with at least 12 months of on-time payments on your credit history for all financial obligations. Once you are ready to start looking for a home, one of the best things a borrower can do is to get pre-approved for an FHA mortgage. Pre-approval means starting a business relationship with your chosen participating FHA lender. The lender asks for credit information from you, does a preliminary check of the data you’ve provided (as well as looking at your FICO scores, income, etc.) and makes a | more...

July 13, 2017

How Do You Apply For An FHA Loan?

By Bruce Reichstein

How do you apply for an FHA loan? There are several things you can do to get the process started on an FHA home loan, but the first step is to determine if you are ready to fill out the application paperwork. Some aren’t as ready as they think, while others are definitely able to get started right away. Let’s examine what’s needed to come to the application process. Preparation And Savings Preparing for an FHA loan means the doing following things: checking your credit reports so that you see what the lender will see when you fill out your application data, correcting any erroneous entries in your credit report, making sure you have 12 months of on-time payments on all financial obligations before applying, and saving up for your | more...

Refinancing a Second Home With An FHA Mortgage Loan

July 7, 2017

Who Qualifies For FHA Loans?

By Joe Wallace

Who qualifies for an FHA mortgage loan? There are lots of misconceptions about this-some people think FHA mortgage loans are only for first-time home buyers, others might wrongly think FHA loans are only for people who can’t afford a conventional mortgage. But the truth is much different-FHA loans require borrowers to financially qualify, but there are not restrictions on who can apply when it comes to past home ownership, “maximum income” or other factors. FHA Loans Are For First-Time Home Buyers AND Those Purchasing Homes Again That’s correct. FHA mortgage loans don’t, under the basic rules of the program itself, favor first time home buyers with different terms than those who are purchasing another home. Second, or even third-time home buyers can get the same benefits of an FHA mortgage | more...

Credit Scores For An FHA Home Loan: When Low Credit Is Not Bad Credit

July 5, 2017

Who Are FHA Loans Good For? Part Two

By Joe Wallace

Who are FHA loans good for? We’re examining this issue to help clear up some myths and misconceptions about the FHA loan program including the notion that FHA loans are only intended for first-time home buyers (FHA loans are available to all financially qualified borrowers) and the idea that FHA mortgages have an income limit that prevents those with greater incomes from applying (not true). Who Are FHA Loans Good For? FHA loans are good for both first time buyers and those who have returned to house-hunting after owning property. For second-time house hunters (and beyond) the most important thing to remember is that FHA loans have an occupancy requirement and you can only purchase a primary residence with an FHA loan. No timeshares, vacation homes, or other “occasional occupancy” | more...

July 5, 2017

Who Are FHA Loans Good For?

By Bruce Reichstein

Who are FHA loans good for? It’s an excellent question and the answer might surprise you. FHA mortgages are often thought of as “helper loans” due to a misconception that FHA mortgages are specifically for first time home buyers, economically disadvantaged people, or new families. What’s the truth? FHA Loans Are Available To All Financially Qualified Applicants There is no minimum income limit OR “maximum income” cutoff for FHA home loans. A borrower cannot earn “too much money” and be disqualified as a result. FHA home loans are for anyone who meets the minimum FICO score requirements, has a reliable payment history on all financial obligations, and can show that their employment is stable and likely to continue. FHA Loans Are For All Types Of Borrowers Some mistakenly believe that | more...

June 29, 2017

What Is An FHA Loan Appraisal?

By Bruce Reichstein

What is an FHA appraisal? Simply put, it’s a tool used by the lender to make sure the property to be purchased with an FHA mortgage meets minimum standards. It’s also used by the lender to establish the fair market value of the property for the purpose of setting the proper FHA loan amount. FHA appraisals require a trained, impartial professional who is approved by the FHA. The lender and the appraiser do not “work together” in such a way that puts the appraiser in a compromising position by the lender. Instead, the appraiser is selected, she does her work and submits reports that detail the results of the appraisal. How do FHA loan appraisals work? The appraiser must visually inspect the property, noting any defective conditions, building code issues | more...

June 29, 2017

What Is An FHA Loan Inspection?

By Joe Wallace

What is an FHA loan inspection? That is a tricky question to answer because the very phrase “FHA home inspection” implies something that is not true; that the FHA puts a stamp of approval on homes promising the borrower that they are defect-free once “inspected”. There is no such thing as an FHA home inspection. There IS, however, an FHA home APPRAISAL. But borrowers tend to mistakenly assume that the appraisal process is the same thing as a home inspection. These two things could not be further apart. Home Inspections Are Optional, But Very Necessary A home inspection (not an FHA appraisal) is an optional process the borrower is responsible for arranging and paying for and is not associated with the FHA appraisal in any way. The inspection should be | more...

How much can I borrow with an FHA refinance loan?

June 12, 2017

How To Apply For An FHA Loan: The Paperwork You Need

By Joe Wallace

In our last blog post we discussed how to apply for an FHA loan including issues related to credit and getting pre-approved for the loan. Getting ready for your mortgage loan application takes time-you need to have 12 months of on-time payments for your financial obligations leading up to the application, and you need to check your credit report to make sure you know what the lender will see at application time. But what is required when you actually start to fill out the paperwork for the mortgage? Credit, Employment, and Tax Data The lender needs a variety of information to approve your mortgage loan. That includes tax paperwork-anticipate the lender asking for at least two years of tax documents and have them ready at application time. Your lender will | more...

June 12, 2017

How To Apply For An FHA Loan

By Joe Wallace

Do you know how to apply for an FHA loan? Getting an FHA mortgage is much like any other type of home loan when it comes to taking the same amount of time to prepare, examine and improve your credit rating, reduce your debt-to-income ratio, and other issues that can help with loan approval. Good preparation is the key to any home loan, even those that have more forgiving credit requirements such as FHA mortgages. Your lender will need to see proof that you are a good credit risk, have a stable and reliable form of income, and have an acceptable amount of debt compared to the amount of income you get each month. So how do you apply for an FHA loan? It is strongly advise that borrowers give | more...