Articles Tagged With: FHA Home Loan

June 10, 2024

When You Need To Renovate Your Home

There is more than one way to improve your home in 2024 with an FHA loan. Do you want to cash out the equity you have built in the home and use some of the cash for repairs? In such cases, an FHA cash-out refinance is the right loan. But in other circumstances, a different FHA loan option may be better. How do you choose? FHA Rehab Loan Options The FHA 203(k) rehab loan helps those who want to buy or refinance a fixer-upper home or a house that needs improvements to bring it up to code. The FHA 203(k) rehab option is for any qualified borrower, and there is a disaster relief version known as the 203(h) for those who have homes in federal disaster areas. FHA 203(k) rehab | more...

May 30, 2024

Before You Reach Closing Day

By Joe Wallace

Once your home loan application is approved, is a borrower really home free on the way to closing day? Is the loan application a done deal once approved? Not quite, and that’s a factor some new borrowers should keep in mind at all times. Never assume the deal is done until the keys are in your hand. Why do we say this? There are important reasons which we explore below. Damage To The Property The house you want to buy with an FHA loan may be in great condition when you make an offer to the seller. But what happens if the house experiences a major disaster, fire, or even an accident? If your loan has not yet closed, you and the lender must determine whether the sale can happen. | more...

May 29, 2024

How To Avoid Confusion When Buying Your First Home

By Joe Wallace

Many first-time house hunters are confused by mortgage loan industry jargon, real estate acronyms, and industry terms used incorrectly. How do you separate the facts from the fiction when learning new terms along the way to closing day? There are many issues. Calling an appraisal an “inspection” is one good example (see below.) There are also industry terms that sound familiar but don’t mean what some think they mean. The whole concept of mortgage insurance is a great example (see below). We examine some of the most common of these below. Owner-Occupied Homes Are Not Investment Properties An FHA purchase or refinance loan is meant for owner-occupiers. These are the buyers who want the FHA loan to be used for the property they intend to live in. An FHA purchase | more...

May 24, 2024

Commonly Asked Questions About Applying For An FHA Home Loan

By Joe Wallace

Are you ready to stop renting and start owning your own home? The FHA home loan program was designed to help borrowers get into affordable homes with a low down payment requirement. FHA loan rules feature more forgiving FICO score standards (lender standards will also apply), and first-time home buyers should know there are down payment assistance programs in many states that can help. What sort of questions are common for FHA home loans? Read below to learn some important details every new borrower should keep in mind. How Long Does It Take To Save And Prepare For A Mortgage Application? Start planning as early as possible. It’s good to give yourself a year or more to review your credit reports, start monitoring your credit, and work on getting your | more...

May 17, 2024

Conventional Loans Versus FHA Mortgages

By Joe Wallace

What’s the major difference between FHA mortgage loans and conventional loans? Actually, there are several, but the first and most basic difference is that an FHA mortgage is guaranteed by the government. A conventional loan is not. The government’s backing of an FHA mortgage makes the loan less of a risk to the financial institution offering you a line of credit to purchase your home. And because the loan is backed by the government, FHA mortgages feature lower down payment requirements than many conventional mortgages. You may find conventional loans requiring 10 or even 20 percent down, whereas an FHA mortgage for qualified borrowers with FICO scores of 580 or above may qualify for maximum financing. That means a down payment requirement of only 3.5% of the adjusted value of | more...

May 13, 2024

FHA Appraisal Guidelines You Should Know

By Joe Wallace

The FHA and HUD have reformed parts of the FHA single-family home loan appraisal guidelines found in HUD 4000.1. These changes are meant to improve the process for reconsidering an FHA appraisal in cases where there may be defects or violations of FHA policy. Can I Get A Revised FHA Appraisal? Was your FHA appraisal is flawed? In such cases the borrower or lender may be allowed to request a Recosideration of Value (ROV). An ROV is essentially a review of the appraisal to correct report deficiencies or problems with HUD regulatory compliance. You should not expect to be allowed a second appraisal only because the value comes in lower than anticipated. What HUD Says About ROVs The HUD official site says, “A Reconsideration of Value (ROV) refers to a | more...

May 8, 2024

FHA Appraisal Rules Change To Help Borrowers

By Joe Wallace

The FHA and HUD have revised appraisal rules for FHA single-family loans. Among the changes, FHA lenders must now provide home buyers with “clarified guidelines to contest an appraisal or request a reconsideration of value (ROV.) “root out racial, ethnic, or national origin bias in residential property valuations” on homes purchased with FHA mortgages.” HUD Publishes Its New Appraisal Guidelines A HUD mortgagee letter published in May 2024 says there are important changes in HUD’s Nondiscrimination Policy, Appraiser Conduct, and other Federal Housing Administration (FHA) Roster Appraiser requirements. The goal is to create more equity in the appraisal process and “ensure appraisals for insured Mortgages are performed in a competent, independent, impartial, and objective manner” and that appraisers conform to what HUD calls the “Competency Rule.” Changes To FHA Appraisal | more...

May 7, 2024

Is My Credit Good Enough For A Mortgage?

By Joe Wallace

One of the most commonly asked questions about any home loan program including FHA mortgages? “Is my credit good enough?” It’s a great question, but for some applicants, it’s not asked soon enough in the process to make much of a difference. The truth is if you start working on your credit the moment you decide to commit to purchasing a home in the future, the better. And that’s because there isn’t just a single FICO score to aspire to or a single set of tasks to perform so you can be “ready”. What does it take to qualify for any home loan? A combination of factors including your FICO scores, loan repayment history, credit utilization, and employment stability. That’s what it takes to qualify for ANY mortgage. What does | more...

May 1, 2024

What To Know About FHA Loan Application Documents

By Bruce Reichstein

There is documentation required to process your home loan application and knowing what you need to submit in advance will speed up your home loan application journey. Do you know what your home loan or refinance loan transaction requires of you? The lender requires tax documents, information about the sources of your down payment, access to your credit reports, and more. But there are rules about who provides these documents, and you’ll need to be aware of them when gathering your paperwork. FHA Loan Rules On Documentation Some of the information your lender needs comes from you personally. This includes your photo identification and proof of legal residence in the USA (which may be required where applicable). FHA loan rules say you do not have to be a citizen to | more...

April 17, 2024

Questions To Answer Before You Start Househunting

By Joe Wallace

Making assumptions about the home loan process can hurt you. For example, some borrowers believe the FHA loan program is wrong for them because they aren’t financially disadvantaged. That assumption is not true. Others wrongly believe it is impossible to qualify for an FHA loan because they have less-than-perfect credit. This is sometimes true depending on the circumstances but if your FICO scores are above 500, this type of mortgage is worth considering. Additional lender standards may apply but the FHA loan program offers more forgiving credit requirements than some conventional equivalents. Any Residence Can Be Purchased With An FHA Mortgage? FHA single-family home loans are not permitted for investment properties. That said, it’s possible to use an FHA mortgage to buy a one-to-four-unit property but the borrower must live | more...