Articles Tagged With: FHA Home Loan

June 15, 2022

FHA ARM Loans: Good Or Bad Idea?

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...

June 13, 2022

What To Know About Renovating Your Home With An FHA Loan

By Joe Wallace

FHA home loans for renovation include the FHA 203(k) Rehabilitation loan and refinance loan options. There are also FHA Energy Efficient Mortgages or FHA EEMs that allow energy-saving upgrades and improvements to the property. EEMS are add-ons allowed for most FHA home loans, not a separate loan program, and adding an EEM potentially raises your monthly mortgage payment. If you need to apply for an FHA home loan to renovate, the first thing you need to know is that on paper, FHA loan rules say you may be allowed to be your own builder or contractor. However, lender standards will apply and you may find that your FHA lender does not permit this. You’ll need to ask directly as early in the process as possible. FHA loan rules say that | more...

June 10, 2022

FHA Loans: Calculating The Monthly Mortgage Payment

By Bruce Reichstein

One of the most important questions a home loan applicant can ask is, “How much will my monthly mortgage payment be?” While this may seem to be a simple calculation of how much the loan is, divided by how many months the mortgage loan payments are required, the truth is that it’s more complex than that. Mortgage loan applicants have a variety of online mortgage calculators to help them arrive at estimates, but what actually goes into the calculation of your monthly mortgage payment? If it’s not a simple matter of taking the loan amount and dividing it by the number of months the loan term is set for, what DOES go into those calculations? There are a variety of things. The basic calculation we mention is part of it, | more...

June 2, 2022

Applying For Your FHA Mortgage

By Joe Wallace

After you have gotten all the planning done, and after you have saved for your downpayment and gone house hunting, you’ll come to the place where you are finally ready to apply for a home loan. What do you need to know about this process and how it works? One of the most important things to decide is how much personal help you might need to apply. There are three basic options that may be open to you depending on the lender. Whether you need to pre-qualify, get pre-approved, or actually begin the application process itself, your lender may take a specific approach to how your loan documentation and application data is submitted. Some lenders take a very hands-off approach, allowing you to apply and submit online without requiring any | more...

June 1, 2022

June 2022 Is National Homeownership Month

By Joe Wallace

On the last day of May 2022, President Biden issued a proclamation that June 2022 is National Homeownership Month. It’s the 20th anniversary of the observance and the Department of Housing And Urban Development issued a statement about it, reminding us that homeownership has benefits and that equal opportunity and access for all should be the norm in the 21st century. During National Homeownership Month 2022, the FHA and HUD plan a series of events designed to raise awareness of fair housing issues, increase the amount of affordable housing, and make the homeownership process sustainable. “Each June, we mark National Homeownership Month, a time for HUD and FHA to renew our commitment to supporting individuals and families in achieving and sustaining homeownership,” says HUD Secretary Marcia L. Fudge, who was | more...

May 26, 2022

What You Should Know About Using An Escrow Account For Your FHA Loan

By Bruce Reichstein

Are you planning to buy a home? Whether you seek an FHA mortgage or not, you may be required to use an escrow account for the loan transaction. You will need a safe place to deposit earnest money in the buying phase and you may also need escrow to pay your property taxes each year. FHA Loans Require Escrow Your participating FHA lender may require the use of an escrow account. Are you applying for an FHA 203(k) Rehabilitation Loan or an FHA One-Time Close Construction loan? Both types of mortgages require payments to contractors who are renovating or constructing your home. FHA loan funds must be stored in escrow until it’s time to use them. There is no unrestricted cash back to the borrower with these loans, so escrow | more...

May 25, 2022

FHA Condo Loan Rules For Single Condo Unit Approval

By Joe Wallace

Are you looking for an FHA condo loan with a low down payment? Are you having trouble finding a condo project on the FHA-approved list, even with a lender’s help? There may be options for you thanks to the ability to apply for single condo unit approval from the FHA. At one time, FHA loan rules required condo projects to be on or added to an FHA-approved list before they could be considered for an FHA mortgage. But the rules were updated, and it’s possible today to apply for an FHA condo loan for a unit that’s not part of an approved condo project — that unit may still be eligible for an FHA mortgage. This is accomplished via the FHA Single-Unit Approval process which, according to an FHA Mortgagee | more...

May 18, 2022

Home Loans And Credit: Facts And Fiction

By Joe Wallace

Are you worried about your ability to pass a credit check for a home loan? Some borrowers may be justified in their concerns, especially after recent pandemic-related financial setbacks or interruptions in employment. Sometimes borrowers are misinformed about their chances of being approved for a mortgage–it’s never a good idea to assume you cannot qualify even if you’re concerned about past credit issues. What do you need to know to move forward? FHA Loan Credit Check Facts: FHA Mortgages Have Lower FICO Score Requirements FHA loan rules in HUD 4000.1 say that applicants with FICO scores of 580 or higher technically qualify for an FHA mortgage. But you’ll need to discuss your scores with a participating lender since lender standards may apply above and beyond the FHA minimum. FHA Loan | more...

FHA Home Loans And First Time Home Buyers

May 11, 2022

Three Things To Know About FHA Loan Choices

By Joe Wallace

If you have never used an FHA home loan before, there are some things to consider when you’re comparing your options. One of those areas involves your basic needs and goals for the home, and another involves the costs of the loan. A third is related to the choices you have when it’s time to sort out how much to pay upfront and what to consider including in the loan amount. FHA Loans: Fixed Rate Or Adjustable? When interest rates go up, it may be tempting to compare your options between fixed-rate mortgages and adjustable-rate or ARM loans. But don’t look at the rates alone; decide how long you think you may keep the home and make your decision about ARMs afterward. Why? Because if you plan to keep the | more...