Articles Tagged With: FHA Home Loan

May 3, 2018

FHA Mortgage Credit Issues

FHA mortgage loans require a credit check, but many future FHA borrowers have some kind of credit issue in their past. Some things aren’t enough to derail an FHA home loan application-old credit issues that have since been resolved, disputed accounts that have since been successfully resolved or have had a payment plan created, etc. What do borrowers need to know about credit issues that CAN negatively affect the ability to borrow? For starters, it’s important to know that the most recent 12 months of your credit activity will be very important. It’s crucial to avoid late and missed payments at all costs in those 12 months for best results. Other FHA loan credit issues can affect your loan (or not) depending on the timing, severity, and nature of the | more...

April 25, 2018

FHA Home Loan Closing Costs You Should Anticipate

By Joe Wallace

FHA home loans have closing costs a borrower should plan to save and pay for. No matter if you need an FHA Home Equity Conversion Mortgage, a 203(k) rehab loan, or an FHA One Time Close construction loan, there will be closing costs to pay for. No borrower should plan for a home loan without anticipating the closing costs. You should budget and save for these expenses as early as possible-once you know you are interested in purchasing a home, you should prepare for these costs. HUD 4000.1 tells the lender that FHA loan rules permit closing costs; the lender “may charge and collect from Borrowers those customary and reasonable closing costs necessary to close the Mortgage. Charges may not exceed the actual costs.” This is not a complete or | more...

April 18, 2018

What You Need To Know When Switching FHA Lenders

By Joe Wallace

There are several reasons why a borrower might decide to switch FHA lenders during a home loan transaction. In cases where the switch happens, borrowers should know certain FHA guidelines that can affect the transaction-especially if an appraisal has already happened. Some borrowers think about switching lenders because they have had an unsatisfactory experience. Others may simply be offered a better deal. But there are some instances where the borrower is tempted to switch lenders because of an appraisal issue-namely that the appraisal did not value the property as expected. In such cases, when a borrower is tempted to get a new lender and a new appraisal, what should be known about that process? The first thing borrowers should know is that new FHA appraisals are not possible simply because | more...

April 12, 2018

FHA One-Time Close Construction Loans: An Option You Should Consider

By Bruce Reichstein

The FHA One-Time Close / Single-Close construction loan is an option you should consider if you are interested in having a home built for you rather than purchasing an already-lived-in property. Construction loans are different than existing construction loans, and the FHA One-Time Close (OTC) / Single-Close construction loan offers a single application, a single closing date, and more peace of mind for the borrower once the loan has been approved. FHA One-Time Close / Single-Close Mortgages And FICO Score Requirements You will have higher credit requirements with an FHA One-Time Close loan due to the higher risk for the lender. Your application may require a FICO score of 620 or higher at the minimum, depending on the lender. Here’s a sample breakdown of FICO score requirements from one hypothetical | more...

April 10, 2018

FHA Loan Rules On Purchasing Multi-Unit Properties

By Bruce Reichstein

Some potential FHA loan applicants are surprised to learn that they can purchase a home with as many as four living units using an FHA mortgage. For a certain percentage of FHA loan applicants, the ability to buy a four-unit property leads to thinking about becoming a landlord, renting out the units and using rental income to offset the expenses of owning the property. This has potential for some borrowers, especially those who already have experience in this area. But FHA loan rules have plenty to say about how your home may be used for such purposes. FHA loan rules in HUD 4000.1 define the acceptable uses of a home purchased with an FHA mortgage. Those uses include renting out unused living units, but with the caveat that the borrower | more...

April 9, 2018

FHA Loan Appraisal Tips

By Joe Wallace

FHA loan appraisal tips can be hard to come by if you are a first-time home buyer and aren’t even sure about the right questions to ask. Do you need to clear up any confusion over the FHA appraisal? Keep reading, you’ll learn that the appraisal process is more simple and straightforward than it may appear at first glance. FHA Appraisals Are Ordered For The Home You Wish To Purchase That may seem alike a simple and obvious fact if you have some experience with the home loan process, but some borrowers might not realize that the appraisal stage of the mortgage comes when you find a home you are serious about buying. You won’t need to know the actual fair market value of a home that you’re just “window | more...

Online Mortgage Calculators For First-Time Home Buyers

April 6, 2018

How Much Is My FHA Mortgage Payment?

By Bruce Reichstein

How much is my FHA mortgage payment? Many borrowers want to get an estimate to figure out how to budget for a mortgage payment, but it is easy to forget that calculating a home loan payment involves more than just doing the math on the principal and interest and the term of the loan. How much will your FHA home loan mortgage payment be? Much depends on what applies to your loan besides principal and interest. For example, you will need to learn how much property taxes are in your area, you will need to know what comparable homes are selling for in your chosen housing market, etc. What’s My Monthly FHA Mortgage Payment? HUD 4000.1, the FHA loan handbook, spells out all the things that will be included in | more...

April 3, 2018

More FHA Refinance Loan Tips

By Joe Wallace

There are many FHA refinance loan tips you should know when planning and saving for your new loan. Refinance loans guaranteed by the FHA feature fixed or adjustable rates, can offer cash back to the borrower, and also come as a no cash-out option for both FHA and non-FHA mortgages. FHA Refinance Loans Have No Down Payment, But Do Have Closing Costs You won’t make a down payment on an FHA refinance loan, but there are associated closing costs with the loan you will need to budget and save up for. The LTV for an FHA refinance loan varies depending on the type of refinancing you seek; talk to your lender about the expenses associated with your refinance loan so you can save accordingly. FHA Loans Do Not Require Private | more...

March 28, 2018

More FHA Home Loan Options For New And Returning Borrowers

By Bruce Reichstein

In our last blog post we discussed some basic FHA home loan options for those who want to buy or refinance a home. More FHA loan options for new and returning borrowers alike include FHA fixed-rate and adjustable rate financing, FHA condo loans, and more. FHA Home Loan Interest Rate Options FHA home loan interest rate options are not the same at all participating lenders. Depending on both your own personal financial qualifications and lender requirements, it may be possible to apply for a fixed rate 15-year or 30-year mortgage, or for an FHA Adjustable Rate Mortgage (ARM) in the same terms. All FHA loans are generally required to amortize within the terms of the loan agreement and FHA loan rules. At the time of this writing, HUD 4000.1 states, | more...

March 20, 2018

Property Flipping And FHA Home Loan Rules

By Joe Wallace

What do you need to know about property flipping and FHA home loan rules? The first thing to know is that flipping is addressed in the FHA loan handbook, HUD 4000.1 and there are measures in place to discourage the practice. That said, the rules which prevent flipping usually apply to the buyer’s side of the transaction. FHA loan rules don’t forbid a borrower from selling the home purchased with an FHA mortgage at any time. But the rules do have something to say about FHA mortgage approval for “flipped” homes. How FHA Defines Flipping Not all homes that are purchased and end up back in the housing market fairly quickly will meet the FHA definition of a flipped house. HUD 4000.1 defines flipping on page 145, stating: “Property Flipping | more...