Articles Tagged With: FHA Home Loan

February 2, 2018

How Do Student Loans Affect My FHA Home Loan Application?

How do student loans affect my FHA home loan application? Some applicants worry about the amount of student loan debt they carry; after all the lender is required to determine the borrower’s debt-to-income ratio as a means to judge whether the loan is affordable or not. The debt ratio must be calculated using existing monthly debt, including student loans that are in forbearance. The fact that the loans are not being paid on at application time isn’t as critical as the idea that the loans may become a monthly obligation in the future, affecting the borrower’s ability to pay the mortgage loan. What do FHA loan rules say about student loans, and those student loans that are in deferment or forbearance? We use those two terms interchangeably here, defined as | more...

FHA One Time Close Construction Loan Option

February 1, 2018

FHA One-Time Close Construction Loan Rules For Maximum Mortgage, Down Payment

By Bruce Reichstein

FHA One-Time Close / Single-Close Construction Loan rules for maximum mortgage amounts and down payments are found in the FHA loan handbook, HUD 4000.1. The FHA One-Time Close mortgage, also known as a construction-to-permanent loan, lets borrowers apply for a loan to have a home built for them using only a single application, loan approval, and closing date. HUD 4000.1 describes it as follows: “A Construction to Permanent Mortgage combines the features of a construction loan (a short-term interim loan for financing the cost of construction) and the traditional long- term permanent residential Mortgage with a single mortgage closing prior to the start of construction”. FHA One-Time Close / Single-Close Construction Loan Maximum Loan Amount Rules Maximum mortgage amounts for FHA One Time Close loans are determined “by using the | more...

January 17, 2018

Who Can Apply For An FHA Mortgage?

By Bruce Reichstein

Who can apply for an FHA mortgage? The answers may surprise you; there are misconceptions about FHA home loans that many have to this day, including who is eligible to apply and when. Do you know if you are eligible to apply for an FHA loan or refinance loan? FHA Home Loans Are For All Income Brackets There is no such thing as earning too much money to qualify for an FHA home loan. Some mistakenly believe that there is a maximum income for FHA home loans that excludes people who “earn too much”. This is not true. There is no maximum income limit for an FHA home loan. You will be required to furnish bank statements, pay stubs (electronic or otherwise), and tax documentation to establish your income, but | more...

January 16, 2018

What Is The Interest Rate For FHA Refinance Loans?

By Joe Wallace

What is the interest rate for FHA refinance loans? This is an important question since your interest rate will affect the overall cost of your refi loan over time, and it’s good to know how rates work before you apply for a new home loan. FHA mortgage loan and refinance loan interest rates have a variety of factors that affect how they are determined for your loan. There is no single determining factor that allows a lender to give a single rate to all applicants-your interest rate is determined based on application data, market forces, and other factors. Does The FHA Set Interest Rates On FHA Refinance Loans? The FHA and HUD do not set or regulate FHA mortgage loan and refinance loan interest rates, except to require that the | more...

January 12, 2018

Can Disaster Relief Grants Be Used As Money To Close An FHA Loan?

By Bruce Reichstein

Can disaster relief grants be used as money to close an FHA mortgage loan? In the wake of the many natural disasters in 2017, many home owners in Texas, California, Puerto Rico, and other affected areas want to know what their options are to recover, rehab, repair, or replace their homes. FHA loan rules require the lender to verify the source of all funds used as a down payment on FHA mortgage loans; down payment money (also known as a Minimum Required Investment or MRI) cannot come from unsecured loans, gifts with an expectation of repayment, or other unapproved sources. The FHA loan handbook, HUD 4000.1, have rules for down payments that are sourced in whole or in part by disaster relief grants. But what does the FHA consider to | more...

January 4, 2018

What Do I Need To Know About Applying For An FHA Mortgage?

By Bruce Reichstein

What do I need to know about applying for an FHA mortgage? The answers to this question can help any potential home loan applicant go into the process better prepared and ready to begin the journey toward home ownership. Preparing For An FHA Mortgage Loan Takes Time The average preparation time for an FHA loan can be up to a year or more, depending on the borrower. Why does it take so long to plan for an FHA loan? Part of the prep time involves saving up for the fees and expenses of the loan including appraisals, compliance inspection fees, and the required minimum down payment. Borrowers should expect to pay a minimum of 3.5% of the adjusted value of the home as a down payment; this is required above | more...

January 2, 2018

Do Townhomes Qualify For FHA Loans?

By Bruce Reichstein

Do townhomes qualify for FHA home loans? It’s a variation of the question on the minds of those looking for several different types of properties to consider buying with an FHA mortgage. What do the FHA home loan rules say about purchasing town homes with an FHA mortgage? FHA Loan Rules For Property Eligibility Page 149 of the FHA Single Family Home Loan rule book, HUD 4000.1, states that the following property types may be purchased with an FHA mortgage: -detached or semi-detached dwellings -Manufactured Housing -townhouses or row houses -individual units within FHA-approved Condominium Projects As you can see from the above, FHA loans are possible for town homes. In some cases, special rules are in place regarding town homes. For example, FHA 203(k) rehab loans have specific requirements | more...

December 27, 2017

What Are FHA House Loans?

By Bruce Reichstein

What are FHA house loans? Are they really only for first-time home buyers? There are many things about the FHA home loan program that are easily misunderstood. Let’s explore how FHA home loans can help you even if you are NOT a first-time home buyer. FHA Home Loans: What They Are Designed To Do FHA mortgages allow qualified borrowers to buy, refinance, and repair/rehab homes intended to be used as the buyer’s primary residence. FHA mortgages include options for cash-out and no cash-out refinancing, and there are rehab loans, FHA fixer-upper loans, FHA construction loans, and several other options. FHA loans can be used to buy suburban homes, condo units, mobile homes, manufactured homes, and modular homes. You can also apply for an FHA One-Time Close construction loan to have | more...

December 22, 2017

Happy Holidays!

By Bruce Reichstein

Happy Holidays! We’re pausing from our usual schedule of writing about home loans, mortgage trends, FHA and HUD news, and related topics in order to celebrate the holiday season with friends and family. From all of us here, have a fun and safe holiday season! Our normal schedule resumes on Tuesday, December 26. Thank you for reading!

December 14, 2017

Can I Get Cash Back On An FHA Mortgage?

By Bruce Reichstein

Can I get cash back on an FHA mortgage? That’s what some borrowers want to know, and the answer varies depending on the type of home loan you seek. FHA Cash-Out Refinancing Loans The FHA cash-out refinance loan is an FHA refi transaction designed to permit the borrower to take cash back at closing time. The amount of cash you get back on this type of loan depends on how long you have been paying on your home loan, and the amount of any add-ons to your mortgage such as financed closing costs, etc. You aren’t allowed to borrower more than the property is worth based on FHA appraisal guidelines and LTV limits. That means you can’t use a home worth $250,000 to secure am FHA cash-out refinance loan for | more...