May 18, 2016
Are you in the planning stages for an FHA loan? Considering your refinance loan options? Regardless of which choice you’re making (new purchase or refinance) there are some important questions to ask yourself when preparing to apply. The first of those is one of the most important. “Am I giving myself enough time to prepare?”
Some borrowers need more preparation time than others. If you don’t have 12 months of on-time payments on all financial obligations, for example, you should definitely take the time to make sure you bring that to the bargaining table. Lenders will be looking for that 12 months-or-better reliability to establish your creditworthiness.
Some borrowers need more time to save up for certain closing costs and, in the case of new purchase FHA loans, the required minimum down payment. There’s no such thing as a zero-down FHA mortgage loan, so you’ll need to anticipate that down payment.
And that brings us to another important question to ask about your FHA loan–do you know how much your down payment might be? You can use an online mortgage loan calculator to help get an estimate for planning purposes. Knowing the approximate down payment is a big help, as is knowing how much your potential tax liability might be with the new loan.
Do you know how much debt you have versus your monthly income? That’s a lender question you should know the answer to before the loan process begins, as the answer could affect your chances at loan approval.
Another important question to ask about your new loan is what type of mortgage or refinance loan you want. It’s easy to assume you want a fixed rate mortgage, but some borrowers can and do explore their options with adjustable rate loans. If you are considering this, it’s very good to know what the terms and conditions for adjustable rate mortgages (ARMs) are, how FHA ARM loans differ from conventional versions of the same thing.
Some borrowers apply for FHA ARM loans with a strategy for refinancing later down the line. Others may apply for such a loan because they want lower costs up front with an introductory interest rate offer. But whatever your motivations are for applying for an ARM, you should know how and when your rates could change.
And finally, it’s good to know you have a source of help in the FHA loan planning process. Did you know you can call the FHA directly and request a referral to a local, HUD-approved housing counselor who can help? Call the FHA at their toll-free number: 1-800 CALL FHA.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:
http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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