May 2, 2012
FHA Loan Reader Question: Rules on PMI
A reader asks, “My loan is 635,000 and my home is appraised at 795,000.
Articles Tagged With: FHA Counseling
April 17, 2012
FHA Loan Reader Question: Chapter 7 Bankruptcy and Foreclosure Actions
A reader asks, “I filed Chapter 7 in 2010 and only 1 item was included. I filed due to divorce in 2007 and ex spouse did not pay house payments and he was evicted in 1/09 and home was padlocked and forgotten about by B of A. After so many letters and calls B of A finally foreclosed on padlocked property in 2011 THREE YEARS later. I have great credit score of over 700+and would like to buy. I have been renting for over 3 years. Is
March 30, 2012
FHA Loans and Credit Reports
One frequently asked question about FHA home loans involves the credit check. Many borrowers want to know what credit score the lender is looking for, (many lenders require a minimum score of 620) but many more also want to know what kind of credit reporting data the loan officer needs to approve or deny an FHA home loan application. There are many areas the lender must review as part of the FHA loan application. A typical credit check includes a review of all credit inquiries over the last three months–one reason why many lending experts recommend not applying for new credit cards or other lines of credit before or during a home loan application. The lender must also review credit information from the last seven years of the applicant’s credit | more...
March 1, 2012
Why Was I Rejected For An FHA Home Loan?
We get many reader comments and questions about FHA insured home loans. Many of them involve the loan process, appraisal procedures and refinancing issues, but some people ask us why they were turned down for an FHA loan, or want to know about the rules concerning loan approval and denial. When an FHA home loan applicant is denied a loan, there are several things which must happen. Many borrowers rightly want to know the specific reasons they were turned down for a home loan and whether it’s possible to try again after addressing the concerns which led to having the FHA loan application denied. Did you know the lender is required to inform the borrower not only as to the reasons why the loan was turned down, but in some | more...
February 20, 2012
FHA Loan Reader Question: Self-Employed Borrowers
A reader asks, “Is it possible to get an FHA loan if the ‘gap’ in employment was due to starting your own business? I have 1099?s that show income, as well as pay stubs as a contractor with a contract in place. The company paying me wants to hire me full time as a w-2 employee.” FHA home loans require the borrower to verify employment, but the lender does not have to deny a loan simply based on alternative, non-traditional, or self-employment. However, the rules for these types of employment are a bit more stringent so that the loan officer may properly verify income. When you fill out an FHA loan application, you’re required to list your employment prior to the period of self-employment, plus list out specific details of | more...
February 15, 2012
FHA Loan Questions: Is There Any Way Around My Bankruptcy?
A reader asks, “Bankruptcy filed just 2 years ago, is there a way around that? Have a descent (sic) income, employment and debt to income ratio.” There are two types of bankruptcy borrowers sometimes ask about in these cases. One is Chapter 7, where the borrower has debts discharged. The other is Chapter 13, where borrowers have a restructured payment plan enforced by court order. For Chapter 7, FHA loan rules require a minimum two year waiting period from the discharge of the bankruptcy before a borrower may apply for a new FHA mortgage. There is no workaround for this two-year minimum, even when the borrower has tried to reestablish good credit and employment in the wake of the bankruptcy. However, for those who have filed Chapter 13 bankruptcy, FHA | more...
January 18, 2012
FHA Loan Assumption: An Alternative to Foreclosure
FHA loan assumption is a process which lets one FHA borrower assume the debt on an existing FHA home loan started by another borrower. FHA.gov states,
December 19, 2011
FHA Refinancing Loan Requirements
One recurring question in the reader comments section as of late involves the rules of cash-out refinancing loans and streamline refinancing loans insured by the FHA. Some borrowers seek loans on property that no longer has a mortgage, and wonder if FHA refinancing loans can help. Borrowers looking at options including FHA cash-out refinancing or streamline refinancing learn there are important differences between the two. FHA streamline loans require the home to have a lien, otherwise there is no loan to refinance. Without an existing mortgage, there’s no possibility an FHA streamline loan can be underwritten for that property. For example, in the HUD.gov frequently asked questions section, under the heading, “Streamline Your FHA Mortgage”, the site states; “FHA has permitted streamline refinances on insured mortgages since the early 1980’s. | more...
December 13, 2011
FHA Loans, Military Applicants, and Occupancy Rules
There are many reasons why a military member could choose to apply for an FHA insured home loan instead of applying for a VA mortgage. Those reasons may include occupancy issues, personal choice when considering FHA loan fee structures versus VA insured mortgage fees, etc. The decision to purchase a home with an FHA mortgage instead of a VA loan could be influenced in part by language in the HUD document 4155.1, Mortgage Credit Analysis for Mortgage Insurance, which addresses occupancy issues. According to the VA official site Frequently Asked Questions list, occupancy rules for a VA Home Loan include a requirement that the veteran or spouse occupy the property bought with a VA insured loan as the primary residence: “Q: I am a single veteran stationed overseas and want | more...
December 13, 2011
FHA and HUD Information In Spanish
The FHA and HUD offer a wide range of information, advice, and news about FHA insured home loan programs. Part of that information includes FHA/HUD resources in Spanish. Did you know there’s an entire Spanish-language site dedicated to the same information provided in English? The Spanish language version of these pages is available at http://espanol.hud.gov/home.html and features information about buying vs. renting, home economics, FHA loan advice and other valuable resources. For those who have already purchased homes with an FHA mortgage, there are resources including topics on FHA/HUD refunds and “refund tracers,” refinancing options, foreclosure avoidance and other important details. When it comes to foreclosure avoidance advice, borrowers in trouble on their FHA loans in need of Spanish-language resources should see the page titled, “Gu