Articles Tagged With: Down Payment

April 19, 2018

Where Can My FHA Loan Down Payment Money Come From?

Where can my FHA loan down payment money come from? It’s an important question to ask, and some borrowers might not understand the difference between closing costs that are not part of the down payment compared to what is allowed to be counted toward it. FHA Loan Down Payment Requirements For most forward FHA mortgages, the down payment requirement includes a minimum of 3.5% of the adjusted value of the home. Some FHA home loans such as refinance mortgages don’t require a down payment; FHA rehab loans for those in Federally declared disaster areas are not required by the FHA to make a down payment regardless of whether the rehab loan is a forward mortgage or a refi. Is My Up Front Mortgage Insurance Premium Part Of My Down Payment? | more...

Conventional Loan Interest Rates Make History, FHA Loan Rates Still Incredibly Low

March 19, 2018

What You Need To Know About Identity Of Interest Transactions

By Joe Wallace

What do you need to know about FHA loan down payment rules and identity of interest transactions? We’ve been covering this topic more recently due to some reader questions about how it all works; we’ve noticed some confusion about the rules in this area and who those rules apply to. FHA identity of interest transaction rules are specifically for borrowers who have a family or business relationship with the seller. In such cases, the general rule is that a 15% down payment is required. The confusion comes in over who this applies to. FHA Loan Rules For Down Payments When The Seller Is A Family Member Or Business Associate Because identity of interest transactions require a higher down payment, naturally borrowers want to know if there are exceptions and how | more...

March 16, 2018

How Much Is My FHA Home Loan Down Payment?

By Bruce Reichstein

How much is my FHA home loan down payment? That is a very important question to ask, since borrowers will need to save up for the down payment, or use approved sources for it. There is no specific dollar amount specified for your FHA home loan down payment, since the down payment is calculated using the adjusted value of the property following an FHA appraisal. Borrowers hoping for a specific dollar amount should estimate the amount of a possible down payment using a figure that is reasonably contained within the house hunter’s price range. This dollar amount will be an estimate only since the true value of the home for down payment purposes won’t be available until after the appraisal process is complete. FHA loan rules specify that for most | more...

March 9, 2018

FHA Loan Down Payment Rules You Should Know

By Joe Wallace

FHA loan down payment rules you should know include requirements for source funds, and what contributions by “interested parties” mean for a borrower’s minimum cash investment. FHA loan rules for down payments are found in HUD 4000.1, which has a lot to say about how much should be put down for a new purchase home loan transaction, and where that money can come from. FHA Loan Rules For Down Payments: FICO Score Requirements Did you know that your FICO score can affect how much down payment you are required to make on your mortgage loan? FHA loan rules specifically require a minimum credit score of 580 or higher to qualify for the lowest down payment of 3.5% (of the adjusted value of the home). 580 is the FHA minimum; your | more...

Rent Or Buy? Arguments For Purchasing A Home With An FHA Mortgage

February 27, 2018

FHA Home Loan Down Payment Rules You Should Know

By Joe Wallace

FHA home loan down payment rules you should know include the minimum amount down, acceptable sources of down payment funds, and how other closing costs and associated expenses related to your down payment requirements. Do you know how your chosen FHA lender will calculate your down payment? Knowing before you apply can help plan and save for this and other required closing costs. FHA Loan Down Payments: A Minimum Required Investment FHA loan rules in HUD 4000.1 refer to the down payment as a minimum required investment (also referred to as an MRI for short), not to be confused with the borrower’s Total Required Investment, described in HUD 4000.1 as: “Total Required Investment refers to the amount the Borrower must contribute to the transaction including the Borrower’s downpayment and the | more...

FHA One Time Close Construction Loan Option

February 1, 2018

FHA One-Time Close Construction Loan Rules For Maximum Mortgage, Down Payment

By Bruce Reichstein

FHA One-Time Close / Single-Close Construction Loan rules for maximum mortgage amounts and down payments are found in the FHA loan handbook, HUD 4000.1. The FHA One-Time Close mortgage, also known as a construction-to-permanent loan, lets borrowers apply for a loan to have a home built for them using only a single application, loan approval, and closing date. HUD 4000.1 describes it as follows: “A Construction to Permanent Mortgage combines the features of a construction loan (a short-term interim loan for financing the cost of construction) and the traditional long- term permanent residential Mortgage with a single mortgage closing prior to the start of construction”. FHA One-Time Close / Single-Close Construction Loan Maximum Loan Amount Rules Maximum mortgage amounts for FHA One Time Close loans are determined “by using the | more...

February 1, 2018

Things You Should Know About FHA Home Loans

By Joe Wallace

There are many things you should know about FHA loans before you start the application process; myths and half-understood features of this home loan program still confuse some applicants going into the process. What follows should help you better understand the basics of the FHA home loan program. FHA Loans Are Not Just For First-Time Home Buyers There is no restriction on FHA loans for those who have purchased a home before. There are no separate terms, qualifications, or other rules for those who have purchased before. All FHA loan applicants who are financially qualified are welcome to apply. FHA Loans Are Available For Condos, Mobile Homes, and Mixed-Use Properties Suburban homes are just one of the types of property you can buy with an FHA mortgage. You can purchase | more...

Is U.S. Citizenship Required For An FHA One-Time Close Construction Loan?

January 29, 2018

FHA One-Time Close Construction Loans: Down Payments and Interest Rates

By Bruce Reichstein

FHA One-Time Close / Single-Close construction loans have different requirements for down payments and interest rate issues can be more complex; many borrowers are interested in this home loan but aren’t clear on the finer points. Today we examine how down payment issues and interest rate rules apply to the FHA One-Time Close construction loan. The FHA loan handbook, HUD 4000.1 describes the One-Time Close loan, also known as an FHA construction-to-permanent mortgage, as a loan that “…combines the features of a construction loan (a short-term interim loan for financing the cost of construction) and the traditional long- term permanent residential Mortgage with a single mortgage closing prior to the start of construction”. FHA One-Time Close Construction Loan Down Payment Rules HUD 4000.1 allows for some unique down payment sources | more...

December 26, 2017

What You Should Know About FHA Loan Down Payments

By Joe Wallace

What you should know about FHA loan down payments includes understanding the lender’s requirements for verifying the source of your down payment funds, and the fact that your down payment is not affected by other home loan fees or expenses. What do these things mean? The FHA Loan handbook, HUD 4000.1, has the answers. FHA Home Loan Down Payment Basic Requirements HUD 4000.1 tells the lender that the lowest possible down payment is 3.5% of the adjusted value of the property. This does not apply for HUD-owned “repo” homes also known as HUD REO properties. The rules for these homes includes the possibility of a $100 down payment (lender standards may also apply). The down payment is a condition of loan approval; the only FHA home loan “forward mortgage” for | more...

December 14, 2017

Can I Get Cash Back On An FHA Mortgage?

By Bruce Reichstein

Can I get cash back on an FHA mortgage? That’s what some borrowers want to know, and the answer varies depending on the type of home loan you seek. FHA Cash-Out Refinancing Loans The FHA cash-out refinance loan is an FHA refi transaction designed to permit the borrower to take cash back at closing time. The amount of cash you get back on this type of loan depends on how long you have been paying on your home loan, and the amount of any add-ons to your mortgage such as financed closing costs, etc. You aren’t allowed to borrower more than the property is worth based on FHA appraisal guidelines and LTV limits. That means you can’t use a home worth $250,000 to secure am FHA cash-out refinance loan for | more...