Articles in Category: FHA Requirements

August 28, 2024

Make A Bigger Downpayment On Your FHA Mortgage

When buying a home with an FHA loan, having a large down payment can help you save money on the loan and even help a lender approve your mortgage application. Here are some key benefits to consider: Strategies For Saving A Downpayment With careful planning and sometimes a bit of outside help, you can achieve your downpayment goal. Here are strategies to help you save: There are also creative means you may consider to boost your downpayment fund: Saving for a larger down payment demands discipline and commitment, but the long-term financial rewards include a more successful homeownership journey through an FHA loan.

August 27, 2024

FHA Loans Versus VA Home Loans: Who Wins?

By Joe Wallace

Some borrowers qualify for VA loans. Others qualify for FHA mortgages. Some may have the option to apply for both. What do you need to know about FHA and VA home loans besides the fact that they are both government programs designed to help borrowers find affordable houses? We examine the differences and similarities below. What To Know About VA Loans VA loans, guaranteed by the U.S. Department of Veterans Affairs, are exclusively for those with uniformed service, including veterans, active-duty service members, and certain surviving spouses. These loans are popular among the military community for the no down payment option, competitive interest rates, and more forgiving credit requirements. Eligibility for VA loans is based on military service. Individuals must meet specific service requirements outlined by the VA. Generally, veterans, | more...

August 23, 2024

What To Know About Credit Before You Apply For An FHA Mortgage

By Joe Wallace

Credit history and FICO scores will be key factors when your FHA lender reviews your home loan application. For first-time homebuyers, the path to owning a home can be complicated early by credit problems, and knowing to avoid some common credit pitfalls is key. We examine some of the major points below. Prioritize Your Credit Report FHA lenders will review your credit reports from the three major credit bureaus to assess your creditworthiness and determine your interest rate for the FHA mortgage. New homebuyers must regularly monitor credit scores and reports for evidence of problems, errors, and identity theft. These, even if not your fault, can reduce your credit score and jeopardize loan approval. Start by requesting free copies of your reports from the official website, AnnualCreditReport.com, and review those | more...

August 19, 2024

FHA Loan Down Payment Rules

By Joe Wallace

One of the biggest worries for some borrowers interested in buying or building a home? The down payment. At the time of this writing, there are not many zero-down payment mortgages offered nationally by participating lenders offering government-backed mortgages; they include VA mortgages and certain USDA single-family home loans. USDA home loans are need-based mortgages with income caps and purchase price limits; VA mortgages are only for those with qualifying military service and certain surviving spouses of those who have died due to military service. There is no need-based requirement for FHA mortgages, and you do not have to be a veteran or a first-time home buyer to apply for one. FHA loans are offered to all who financially qualify, with no income limits. FHA down payment rules include a | more...

August 15, 2024

Fixing Credit Before Buying A Home

By Joe Wallace

When preparing to buy a house, it’s essential to give yourself plenty of time to improve your FICO scores and ensure a strong history of on-time payments before applying for a mortgage. However, there are other crucial aspects of credit repair to consider. To begin a credit repair journey, it helps to understand how credit reporting procedures work. Credit reports, which are compiled by major credit bureaus like Equifax, Experian, and TransUnion, contain comprehensive records of your credit history. This includes your private data, such as your current and former addresses, Social Security Number, and information on your credit accounts. There may also be information in your credit file from public records. Do you have a bankruptcy in your past? That will show up on your report along with any | more...

August 6, 2024

Credit Repair And FHA Mortgages

By Joe Wallace

Resolving outstanding debts and making timely payments can gradually boost your credit score. The Consumer Financial Protection Bureau recommends creating a budget and prioritizing debt repayment to regain financial stability. It’s also vital to monitor your credit reports aggressively at least 12 months before applying for a home loan. Knowing your rights when dealing with credit repair companies is essential. The Credit Repair Organizations Act (CROA) ensures transparency in credit repair services and prohibits deceptive practices. When it comes to home loans and your credit, lenders consider your FICO scores and review your payment history and overall credit record. It’s important to understand that FICO scores don’t necessarily reflect your entire credit story. To have a successful home loan application, maintain good payment habits for 12 months and avoid missed | more...

August 5, 2024

The Myth Of The No Money Down FHA Loan

By Joe Wallace

Many readers want to know if there are any “fair credit” and “no money down” loans for FHA borrowers. While such options may exist in loan programs offered by other agencies, the FHA Single Family Home Loan program does not have a “zero down” option or a “fair credit” home loan. FHA mortgage loans for new purchases require a minimum of 3.5% down, which must come from approved sources that have to be verified by the lender. Some borrowers may be confused by the Department of Veterans Affairs and its VA home loan program. VA Zero-Down Mortgages VA loans feature a no-money-down option, but these loans are only available to qualified borrowers who have served a minimum time in the armed services. FHA loans don’t have this option. Both programs | more...

July 24, 2024

Budgeting And Saving For Your First FHA Mortgage

By Bruce Reichstein

When you decide to commit to buying a home or building one from the ground up using a one-time close construction loan, there are expenses you will need to save up for. If you haven’t started making a checklist of items you will need to pay for up front or choose to include in the loan amount, it’s a good idea to start making one as early as possible. Saving for your loan means identifying the expenses you will pay such as closing costs, appraisal fees, the home inspection fee, the FHA Up-Front Mortgage Insurance Premium, and of course the down payment. The down payment, which is a minimum of 3.5% of the adjusted value of the home, is one of the biggest expenses. That is one reason why it’s | more...

July 18, 2024

FHA Home Loans: What Kind Of House Can I Buy or Build?

By Joe Wallace

FHA loan rules in HUD 4000.1 include guidelines for lenders explaining what types of property are eligible, and what types are ineligible, for an FHA mortgage. You might not realize at first that an FHA mortgage can be used for properties other than typical suburban homes; FHA mortgages can be used to buy or build a typical family house, but also to purchase condo units, manufactured housing, and much more. Allowed Property Types For FHA Loans The list of property types you can choose from includes the previously mentioned types but also: You can buy existing construction, new construction that has never been occupied, or have a home built from scratch using an FHA One-Time Close construction loan. Some Property Types Aren’t Allowed What some don’t realize is that in | more...

July 2, 2024

How To Qualify For An FHA Mortgage

By Joe Wallace

It’s likely the most commonly asked question about FHA loans. “How do I get approved for an FHA mortgage?” The answer starts with some numbers, but there are other important factors to remember. It’s not all about FICO scores, though they play a significant part in the lender’s decision to approve or deny a loan. FHA Loan FICO Score Requirements For Home Loan Approval If your FICO scores fall between 500 and 579, FHA loan rules say you must pay 10% down, assuming lender standards allow loan approval for those scores. Applicants with FICO scores of 580 or higher are required to make a 3.5% down payment. However, FICO scores aren’t the only factor that influences loan approval. Stable Income Rules If you are a typical college graduate, depending on | more...