Articles Tagged With: FHA Home Loan

July 12, 2022

FHA Loan Rules For Self-Employed Borrowers

What do self-employed house hunters need to know about the home loan approval rules applicable to self-employment income? If you are not sure how your FHA lender will qualify you based on your income, keep reading–there are some important facts you will need to know before you fill out FHA loan paperwork. The first thing to know is how the FHA defines “self-employment” and why. The lender is required to ensure your income is stable and reliable and that you will continue to earn that income to help pay for your mortgage. The FHA has different qualification rules for self-employment income; you are basically required to show two years of self-employed income in a similar line of work to your salary, commission, or hourly income when you were not self-employed. | more...

July 11, 2022

FHA Adds New Income Flexibility Guidelines For FHA Borrowers Affected By COVID-19

By Joe Wallace

During the global COVID-19 pandemic, many house hunters experienced a loss of income because of coronavirus-related employment gaps, job losses, and similar financial hardship. When you are applying for a mortgage loan, late and missed payments can have a negative effect on your ability to find an affordable home loan. There were many forms of relief for COVID-19-related economic hardship, but as the fallout from COVID continues, it’s clear that some additional measures are needed. That’s one likely reason the FHA has announced updated COVID-19 credit qualifying guidelines for borrowers trying to buy a home with an FHA mortgage. In early July 2022 the FHA announced new guidelines for participating FHA lenders. These new guidelines permit more flexibility for the lender when qualifying a borrower who may have income or | more...

July 6, 2022

VA One-Time Close Construction Loan Options for Military Veterans Expanded

By Bruce Reichstein

Some house hunters get fed up with looking for just the right home, while others start out their home loan journey knowing in advance they want a house built for them. What options do these borrowers have? There is an FHA home loan known as the FHA One-Time Close / Single-Close construction loan that lets borrowers apply for a single loan that covers both construction costs and the mortgage itself. The FHA version of this type of construction loan requires the borrower and lender to work together to establish a plan for the project including estimated completion times, interest rates, budgets, and more. Some borrowers aren’t interested in FHA home loans since they have other options; do qualifying military veterans have a VA loan version of the FHA One Time | more...

July 6, 2022

Will My FHA Home Loan Application Be Approved?

By Joe Wallace

Will my FHA home loan be approved? That is a common question for some borrowers who worry that their credit isn’t good enough for a home loan, and for borrowers who may have adverse credit information in their credit history. There is no single answer to this question since much depends on the borrower’s credit history, their patterns of credit use, debt ratios, and other factors. But in general there are some areas you can review to determine whether or not an FHA home loan is in your future. Will My Home Loan Be Approved? Occupancy Matters If you seek an FHA mortgage for a house that you (or at least one borrower obligated on the mortgage) do not intend to occupy as your primary residence, you will not be | more...

June 28, 2022

What To Know About FHA Mortgage Insurance

By Joe Wallace

What do you need to know about FHA mortgage insurance? There are basically two payment plans for FHA mortgage insurance premiums; one for 11 years and one for the lifetime of the FHA loan. There is an Up Front Mortgage Insurance Premium you pay at closing time, and then there is the annual mortgage insurance premium split up over the 12 mortgage payments a year you are scheduled to make. FHA Mortgage Insurance: How Long? FHA mortgage insurance is required on most FHA loans. Streamline Refinances and certain other loans like those for homes on Native American tribal lands have a lower rate than for purchase loans and other FHA refinance options. If you pay 10% down on an FHA mortgage you may have the option of ending your FHA | more...

June 27, 2022

FHA Home Loans And Seller Inspections: What You Need To Know

By Joe Wallace

What is a seller inspection and why should you know what it is before you start looking for a home to buy with an FHA mortgage? The National Association of Certified Home Inspectors official site says that a seller inspection, sometimes referred to as a pre-listing inspection, is popular in some areas, “…because they virtually eliminate all the pitfalls and hassles associated with waiting to do the home inspection until a buyer is found.” A seller inspection can tell you (as a buyer) a lot about a home before you decide to make an offer. But why would a seller have an inspection if there’s a risk that a defect or problem might be uncovered that can hurt the seller’s chances to sell the property? Generally speaking, it’s common sense | more...

June 22, 2022

FHA Loans And Rising Rates

By Joe Wallace

If you need to buy a home with an FHA mortgage but you are concerned about rising interest rates, there are some things you can do to help yourself make a more informed choice about your FHA loan options. There are options to haggle with the seller, and there are loan options to consider like an FHA Adjustable Rate Mortgage. In the meantime, you can work to improve your FICO scores which helps the lender offer you a lower interest rate. When it comes to negotiating with the seller, you may find the asking price is too high in general, or you may be looking for a price offset because of rising mortgage loan rates. But it may be tough to sell the idea of a lower price. Instead, you | more...

June 21, 2022

Seller’s Markets, Buyer’s Markets, And FHA Loans

By Joe Wallace

What does it mean to get an FHA loan when you are in a buyer’s market? What does it mean to use an FHA mortgage in a seller’s market? If you are new to house hunting chances are you’ve heard these terms before, but what do they mean in the context of a house hunt? FHA Home Loans In Buyer’s Markets What does it mean to be shopping for a house in a buyer’s market? The simplest answer is that you have an advantage as a buyer because there may be plenty of homes to choose from with little serious competition from other buyers. That lack of competition may be because of the supply of available houses for sale. In a buyer’s market, you would still want to get pre-qualified | more...

June 15, 2022

FHA ARM Loans: Good Or Bad Idea?

By Joe Wallace

Why do people choose FHA adjustable-rate mortgages or choose to refinance with one? There are several reasons including the need to get into a lower rate upfront, as part of an overall strategy for buying and selling the home, or to take advantage of changing interest rates. ARM Loan Basics FHA Adjustable Rate Mortgages feature an introductory rate, and that rate expires after a set amount of time, typically one year. The introductory rate can also be set between three and 10 years. After that time period, the rate adjustments begin. Borrowers do better with ARM loans when they have a strategy for dealing with the rate adjustment periods. Do you plan to sell or refinance before the introductory or initial ARM loan rate expires? That plan works better for | more...

June 14, 2022

Things To Look For When Buying A House With An FHA Mortgage

By Bruce Reichstein

Finding the right home to buy with an FHA home loan can be challenging. If you are a first-time home buyer, do you feel intimidated about making a decision on the size and configuration of the house you want to buy? You are not alone. Fortunately, you can help yourself in this process by making a checklist of features and priorities you can refer to when reviewing each property. This can be a better approach than trying to do it all from memory; you won’t forget to ask the seller or real estate agent about something important if you have it written down in front of you when you take the tour. What To Look For When Buying A Home With An FHA Mortgage: Overall Size That sounds fairly obvious | more...