Articles in Category: FHA Loan Basics

FHA Home Loans And First Time Home Buyers

July 24, 2023

FHA Lender Requirements and Bank Policies

Here is a variation on a typical question we are frequently asked. “I applied for a loan and was told I must submit proof of filing a tax extension for a previous tax year. I was told by my loan officer that I need to show proof of an extension to be approved to close. Is this correct?” There are two critical issues in a situation like this to remember. One is how FHA loan rules work and how lender policies work. The FHA loan program is a voluntary one for financial institutions. Not all lenders participate, but those who do have to meet FHA loan standards and observe FHA guidelines for the loan program. Most financial institutions have their own guidelines above and beyond FHA loan program regulations. If | more...

June 8, 2023

FHA Loans And The State Of The Housing Market in 2023

By Joe Wallace

In the last 12 months, many have speculated about the state of the housing market. We all wonder about when an expected recovery might happen and how quickly we can start reaping the benefits. Before we launch into speculation about the future of FHA loan mortgage rates, it’s a good idea to discuss expectations and how to plan ahead for buying your future home. When Is It The Right Time To Buy A Home? Are you in the planning and saving stages of your home loan? If you are, there’s no reason to speed up that process. just because you expect things to improve in the next quarter of 2023. The same is true for those about to move out of the planning and saving part of the process. If | more...

June 2, 2023

FHA Home Loan Pre-Approval And Mortgage Loan Approval

By Bruce Reichstein

If you are considering an FHA home loan it is a smart idea to get pre-approved for a home loan before you start house hunting. If you are new to the home loan process, you might not be sure what the difference is between FHA loan approval and getting pre-approved for an FHA mortgage. What is that difference? Getting through the initial pre-approval application does not mean you’ve been fully approved for the mortgage. But it IS an important tool for soon-to-be homeowners. Home loan pre-approval is a tool for both borrower and lender to determine if you’re ready to buy based on your income, debt to income ratio levels, the amount of down payment you have saved, etc. Think of pre-approval as the start of the loan process, but | more...

May 25, 2023

Do FHA Loan Payments Increase Over Time?

By Joe Wallace

Could the monthly amount due on an FHA mortgage increase over time? If you want a fixed-rate mortgage, that may seem like a silly question. After all, isn’t the idea behind a fixed-rate home loan to provide predictability and stability in the payments? The short answer is yes, but there are still factors that could change the total amount of mortgage-related expenses over time. Depending on circumstances, the amount you owe each month may change depending on variables such as changes in your insurance, property taxes, and homeowner’s association fees. Adjustable Rate Mortgages Your monthly mortgage payment will change if you have an Adjustable Rate Mortgage or ARM loan. An ARM loan features an introductory period with a (typically lower) “teaser” rate, but once that introductory period ends? The home | more...

May 4, 2023

Interest Rate Issues And Your FHA Mortgage

By Joe Wallace

How high can mortgage loan interest rates go? The highest mortgage rate in American history may have been recorded at a whopping 18.45%. That rate was for a 30-year fixed-rate conventional mortgage in 1981. And what about the lowest mortgage loan interest rate? That may have been the rate we saw in December 2020; 2.68% for a 30-year fixed-rate mortgage, according to Freddie Mac. What influences mortgage loan interest rates? Not the FHA or HUD; these two agencies do not set or regulate FHA home loan interest rates. But other things do affect the rates, indirectly or not: Fed actions to shore up the U.S. economy (more indirectly), investor reaction to those efforts (more directly than Fed acts), whether or not the economy is growing or shrinking, etc. Some Shouldn’t | more...

April 28, 2023

How Much Is Your FHA Mortgage Payment?

By Joe Wallace

Are you new to house hunting? If you have never applied for a home loan before it’s understandable that you might view a mortgage payment as a simple calculation involving the principal and interest multiplied by the number of mortgage payments you have to make. But principal and interest are only two factors that influence how large your monthly mortgage obligation is. FHA Mortgage Insurance Premiums and UpFront Mortgage Insurance Premiums Your FHA mortgage insurance premiums can change how much you pay each month for the home loan. Did you choose to finance the FHA Up-Front Mortgage Insurance Premium or UFMIP? If so, expect an increase in your monthly mortgage costs. Property Taxes Property taxes are part of owning a home, and once you get used to paying them it | more...

March 30, 2023

Buying A Home? Ask Your Seller and Lender These Questions

By Joe Wallace

If you are buying your first home, you’ll want to ask some important questions of both the seller of the house and your participating FHA lender. The lender questions should include asking about the option to buy down your interest rate with discount points, and how much your interest rate could be depending on FICO scores and credit history. You should ask the lender about options for both 15-year and 30-year mortgages even if its just to compare the rates and monthly payments. You should also ask what benefits might be available with a higher down payment and how much your lowest down payment might be based on an estimated sale price and your credit. Questions To Ask Your Seller Some people worry about haggling or even questioning a seller. | more...

November 30, 2022

Budgeting For Your Home Inspection, Appraisal, and Compliance Inspection

By Joe Wallace

When you plan to buy a home with an FHA loan you should be thinking about how much you will need to save for expenses paid upfront, such as appraisals and inspections. You may not, as a first-time home buyer, have the experience to anticipate all expenses you need to pay in the coming months. But there are typical costs you can plan and save for. Home Inspection Costs Did you know there’s no fixed price for home inspections? There are no national cost guidelines or restrictions for this service; home inspection costs will vary based on the housing market and inspections are paid for by the borrower independently of the rest of the home loan process. Home inspections may cost somewhere between $300 and $500 depending on location. Your | more...

November 21, 2022

Housing Market Improvements And Your FHA Home Loan in 2023

By Joe Wallace

Are you looking at 2023 and considering your home loan options to buy a house with an FHA mortgage? There is news from the housing sector that could mean improved conditions for a home loan in the new year. While it’s true that changes in the housing market don’t happen overnight, some mortgage blogs and news outlets are reporting that the typical time houses spend on the market is increasing. Thats a good sign considering how competitive the housing market was last summer. Is this the only indication that conditions may be improving for house hunters? Demand for houses seems to be falling and home loan interest rates are showing signs of gradual improvement. This could make 2023 a much better time to shop for a house than the summer | more...

October 17, 2022

House Hunting Advice For First-Time Home Buyers

By Joe Wallace

When you start making plans to work with a realtor, there are some very good things to consider ahead of time. Checklists, online mortgage calculators, and other home-buying tools are only some of the things you’ll want in your house-hunting toolkit when you are ready to become a homeowner. Decide What Your Priorities Are For Your New Home Before filling out FHA home loan paperwork, and long before you decide which real estate agent to work with, you should have an idea of what your main priorities are for your new home. Do you need a home located near a certain school or type of school? Are you looking for someplace quiet and residential and nowhere near a shopping mall, gas station, or movie theater? Some priorities are more important | more...