April 3, 2012
Yesterday, we answered a reader question about FHA loan Mortgage Insurance Premiums. We were asked, “I thought that it was announced recently that FHA insurance premiums were being decreased, not increased?
April 2, 2012
A reader asks, “I thought that it was announced recently that FHA insurance premiums were being decreased not increased?” Effective June 11, 2012, FHA Up Front Mortgage Insurance Premiums (UFMIP) will decrease for certain types of FHA Streamline Refinance Loans. According to the FHA Mortgagee Letter 12-4, “For all SF Forward Streamline Refinance transactions that are
March 28, 2012
Potential home buyers at the very start of their FHA home loan journey should take advantage of three free online resources that can help prepare the borrower. The first of these resources is the online mortgage calculator. These are offered by private agencies such as FHA.com, and by official government websites such as Ginnie Mae. The online mortgage calculator can help you plan and budget for an FHA home loan by showing you whether your current income is enough to qualify based on your monthly debts and other factors. Another important resource is the Department of Housing and Urban Development’s online Homebuyer’s Kit, which offers everything from a cost analysis of buying versus renting to learning about home buyer’s assistance programs in your state. This kit is fairly comprehensive and | more...
March 28, 2012
A reader asks, “Is there a limit to how much premium the lender can make on a loan? In other words is there a cap on the interest rate increase.
March 23, 2012
According to the FHA official site, streamline refinancing for FHA home loans has been offered since the 1980s. While “streamline refinancing” refers to the amount of paperwork involved with processing the new home loan, it is not meant to imply there are no costs involved with the refinancing loan. FHA streamline refinancing loans for borrowers with existing FHA mortgages must result in either a lower interest rate, a lower monthly payment, or both. Exceptions are made when the borrower is refinancing into an FHA streamline mortgage from an Adjustable Rate Mortgage, also known as an ARM loan. Unlike FHA cash-out refinancing, no money is permitted to go to the borrower as part of the streamline loan. That means no “debt consolidation” or other purposes are permitted with FHA streamline loans–these | more...
March 21, 2012
A reader asks, “I am separated from my husband…and want to buy me a home. We do not have any children together and I do not want alimony, he can have the house we once shared. He has agreed. I am using a down payment from my 401k from my job. What do you know about these situations?” While this question is far too general to answer specifically, we can talk about some of the basic issues a borrower in this situation might face. The big question in this situation is whether the reader is obligated on the first home. FHA home loan applications are reviewed for three basic things–credit rating, debt-to-income ratio, and verifiable income. There are other issues, but for this reader question these are “the big three”. | more...
March 15, 2012
A reader asks; “I have a student loan that was passed over to a collection agency. I came to a payment agreement with my case manager to pay $50 monthly payments. The original payment amount before collections was $200 a month. I have made consistent payments for 2 years now.” “I am set to close on a house in a few weeks. My mortgage lender is requiring a letter from my collection agency verifying our payment arrangement before I can close. I have called and talked to my case manager at the agency three different times and he is refusing to send any kind of validation letter to acknowledge the payment agreement. The payments have been set up on automatic draft out of my checking account which the agency set | more...
March 9, 2012
An FHA-assigned appraisal is a required part of the FHA home loan process. This appraisal insures the property being purchased with an FHA mortgage loan meets FHA standards and assigns a fair market value to the property. But the appraisal does not make any guarantees that the home is defect-free. The borrower must pay for a home inspection to get a better idea of the true condition of the property, any hidden or possible defects, etc. FHA loan applicants should definitely plan to pay for both an appraisal and a home inspection–the FHA appraisal is the mandatory expense, but the inspection is technically optional. But it’s an option that should never be passed up. Even though a property has been approved for an FHA guaranteed loan does not mean it | more...
March 8, 2012
FHA new purchase home loan programs, where the borrower is buying a new or pre-owned home, require the borrower to make a minimum down payment of 3.5% of either the appraised value of the property or the asking price of the home, whichever is lower. FHA loan down payments are strictly regulated, and not just with the percentage required to put down as the minimum cash investment. Did you know the FHA also requires documentation on the source of the down payment money depending on circumstances? FHA rules state documentation is required when the borrower pays more than 2% of the sale price. It
March 7, 2012
There are several government-backed home loan programs available for qualified borrowers. Some programs are for a specific set of people, such as the VA insured loan program for eligible veterans, while others like the FHA insured mortgage loan program are intended for any qualified borrower. There’s sometimes a bit of confusion between VA loan rules and FHA home loan regulations because the two programs are insured by the government, albeit by different agencies. VA home loans, for example, feature a no-money-down option that is sometimes mistaken for a feature of the FHA home loan program. Occasionally we get a reader question asking if the FHA loan program offers a similar no down payment FHA mortgage or if first-time FHA loan applicants are required to make a down payment. All FHA | more...