Articles Tagged With: FHA Closing Costs

November 5, 2019

FHA Loan Closing Cost Rules

FHA home loan closing cost rules affect your home loan no matter if you are buying a mobile home with an FHA loan or having a house built on your own land using an FHA One-Time Close construction loan. Closing cost rules for FHA home loans have two “lanes” (our term, not a bit of industry jargon) where the rules are applied–one is the rules from the FHA Single-Family Lender’s Handbook (HUD 4000.1) and the other are the lender’s own standards and requirements. FHA loan rules and lender standards will both apply. FHA loan closing cost rules begin with the understanding that your down payment and your closing costs are two separate expenses. Your closing costs cannot be used as part of your down payment. FHA loan rules in HUD | more...

July 31, 2019

FHA Home Loan Down Payment Rules: Cash To Close Sources

By Bruce Reichstein

FHA home loan down payment rules include requirements for the sourcing of funds used to make that down payment and/or provide cash to close the deal. Down payment funds and sources of cash to close must be properly documented by the lender to insure the cash does not come from unacceptable sources such as non-collateralized loans (payday loans, credit card cash advances, etc.) or in the form of “gift funds” that are not really gifts but have an expectation of repayment. When discussing the permitted sourcing of FHA home loan down payments or cash to close, many borrowers want to know if certain kinds of sources are acceptable to the lender. That can include proceeds from the trade-in of a manufactured home, the proceeds from the sale of real estate, | more...

Coronavirus And Home Loan Appraisals: What You Need To Know Now

July 15, 2019

VA One-Time Close Construction Loan Tips

By Bruce Reichstein

There are plenty of VA One-Time Close (VA OTC) / Single-Close construction loan tips you should know about-probably as many as for FHA One-Time Close loan or the USDA One-Time Close equivalent. Did you know that the size of your project could affect your ability to get a no-money-down VA home loan? Or that you should discuss the amount of time your VA OTC loan might take with the seller of the land if you are purchasing land and building the home? Know these issues before you apply for best results when you are ready to commit to your VA construction loan. VA One-Time Close Construction Loans / Single-Close Construction Loans Require A Contractor VA loan rules for construction loans require the borrower to hire an outside contractor rather than | more...

April 25, 2019

FHA Loan Down Payment And Closing Costs

By Bruce Reichstein

The FHA home loan program has been described in other publications as being “the mortgage program first-time home buyers love”, but many people worry about closing costs and down payment requirements. How do you pay for FHA home loan closing costs and the down payment? The key is to first understand what these expenses are. FHA Home Loan Origination Fees and Other Closing Costs FHA home loans, like many other mortgage loan products, permit the lender to charge a loan origination fee. These fees will vary from lender to lender and it’s best to contact the lender directly to learn how much the origination fee might be. There may be other closing costs in addition to the ones mentioned below including expenses related to hazard insurance, compliance inspections, flood zone | more...

February 5, 2019

FHA Home Loan Approval For First-Time Home Buyers

By Joe Wallace

What should you know about FHA home loan approval? Buying a first home or a larger property after purchasing a starter home with an FHA mortgage can be less stressful if you remember a few important things right at the start. FHA Home Loans Require A (Lower) Down Payment FHA mortgage loans require a minimum of 3.5% down. Compare that with other mortgage loans such as a conventional mortgage, or other government backed mortgage loans such as the USDA program. Yes, when you do research on USDA loans, you will find a no-down payment option offered to some qualified borrowers. But USDA loans are need-based, and FHA home loans are not. Any financially qualified borrower can apply for an FHA loan if they intend to use the house they buy | more...

August 2, 2018

FHA Home Loan Advice: Wait Until After Your Closing Date For New Credit

By Joe Wallace

Why should borrowers wait until after the closing date to apply for new credit? This is a very important issue that FHA borrowers need to be aware of before applying for a new purchase loan, FHA construction loan, or even a refinance loan. What makes the credit issue so important once you have been pre-approved for a home loan and start house hunting? Why should you never apply for new credit once the loan application has been submitted and you await final loan approval and the closing date? Home loans require the lender to check more than once to make sure the borrower is credit-worthy and can afford the mortgage loan. These checks may be automated or may be done manually by the lender depending on circumstances. Just because your | more...

July 30, 2018

What You Need To Know About Closing Your FHA Mortgage

By Joe Wallace

What does an FHA borrower need to know about the closing date for an FHA mortgage? There are several issues to consider, especially when it comes to whether or not your transaction is occurring in a wet funding or dry funding state. Home Loan Closing Dates: The Difference Between Wet Funding And Dry Funding The terms “wet funding” and “dry funding” refer to states where requirements to close may require the loan to actually close and funds be disbursed on the closing date, and states where that does not specifically happen on the closing date. A wet funding state requires completion of the loan on the closing date or in a specified period of time after the closing date procedure. Dry funding means the paperwork for the mortgage is not | more...

July 10, 2018

Before Your FHA Home Loan Closing Date: What You Should Know

By Bruce Reichstein

Before your FHA home loan closes and you sign on the dotted line, there are some things you should know. Home closing paperwork spells out the agreements you have made on the mortgage and these documents are legally binding. It’s a very good idea to be familiar with them and know their contents before you sign. What kind of paperwork will you get with a new purchase mortgage loan at or before your closing date? One very important document is known as the Closing Disclosure and it should be compared to another document you received earlier in the FHA loan process known as the Loan Estimate. The estimate is not an indication that your FHA loan has been turned down or approved, it is simply a way to add up | more...

July 5, 2018

Cash To Close An FHA Home Loan: What You Need To Know

By Joe Wallace

What kind of cash to close do borrowers need with an FHA mortgage loan? The amount and nature of the cash to close the FHA loan will vary depending on several factors including the amount of your down payment, whether you have financed the Up Front Mortgage Insurance Premium or not, etc. FHA Loans Cash To Close: Your Down Payment For new purchase home loans, FHA loans cash requirements to close the deal will include the minimum 3.5% down payment for borrowers who qualify for that lowest down payment with FICO scores that meet both FHA minimums and lender requirements. 10% down is required for borrowers with FICO scores that don’t fall into the ranges specified by FHA loan rules and lender standards. But the exact amount of cash needed | more...

May 18, 2018

Maximum Loan Amounts For FHA One-Time Close Construction Loans

By Bruce Reichstein

What is the maximum loan amount you can borrow with an FHA One-Time Close / Single-Close construction loan? The actual dollar amount is not fixed, it depends on variables including the FHA loan limits in a given housing market and whether or not the borrower is buying land in conjunction with the project. Calculating the Maximum Loan Amount For An FHA One-Time Close / Single-Close Construction Loan The FHA loan rules for One-Time Close / Single-Close loans, also known as construction-to-permanent mortgages, are found in HUD 4000.1 and include a breakdown for lenders on how to calculate the maximum mortgage loan. The loan limit takes into account the borrower’s down payment and the Loan-To-Value ratio (LTV). HUD 4000.1, page 445 instructs the lender: “The maximum mortgage amount is calculated using | more...