Articles Tagged With: FHA Home Loan

January 5, 2017

Mortgage Rate Trends: Moving Lower

Since our last report, mortgage rate trends have been looking downward rather than upward, which is a welcome development. It’s far too early to call it a “downward trend” but for FHA borrowers especially this week has been a better one. There is still at least one significant economic data release (employment data) that could affect mortgage loan rates this week depending on investor reaction, and it’s best in the early days of 2017 to view any improvement as just that rather than indications that we are moving out of the upward trend that began around the time of the November election. At the time of this writing, 30-year fixed rate conventional mortgages were reported at a best execution range between 4.125% and 4.375% depending on the lender. Our sources | more...

When Is An FHA Loan Better Than A Conventional Loan?

December 30, 2016

Property Types Eligible For FHA Mortgages in 2017

By Joe Wallace

FHA mortgages for single family residences include a wide variety of eligible property types. You can purchase a typical suburban home with an FHA loan, a condo unit, manufactured home, modular home, or other approved structure meant to house a family that qualified under FHA loan rules. These properties can be single-unit homes or have up to four living units. While it’s true that not all lenders approve loans for all the possible types of housing available under the FHA program (some lenders choose not to loan money for mobile homes or new construction homes, for example) there are some general guidelines about the types of property you can purchase from a participating lender. FHA mortgages are approved for those who intend to be owner-occupiers. FHA mortgages are not available | more...

December 28, 2016

Buying HUD Homes With FHA Loans

By Joe Wallace

On the FHA/HUD official site, there is a section covering the purchase of HUD homes, including tips on which FHA home loan might be best for these transactions. According to the Department of Housing and Urban Development official site, “A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim”. These homes are offered for sale via HUD. Who is qualified to buy one of these properties? According to HUD.gov, “Anyone who has the required cash or can qualify for a loan (subject to certain restrictions) may buy a HUD Home. HUD Homes are initially offered to owner-occupant purchasers (people | more...

December 21, 2016

FHA Short Refi Loans in 2017?

By Joe Wallace

HUD 4000.1 is the FHA single family home loan rule book. Whether you are purchasing a suburban home, a condo unit, or a mobile home with an FHA mortgage, the rules in HUD 4000.1 pertain to your FHA loan transaction. This set of rules also includes guidance on FHA refinancing loans including a program known as an FHA short refi loan, also called “Refinance of Borrowers in Negative Equity Positions Program”. This program, according to HUD 4000.1, “allows the Mortgagee to refinance a non FHA-insured Mortgage in which the Borrower is in a negative equity position”. That’s commonly known as being “underwater” on a home loan. An FHA short refi requires the lender to “write off at least 10 percent of the unpaid principal balance”. The borrower must be in | more...

December 19, 2016

FICO Scores And FHA Loans

By Joe Wallace

Your credit report and FICO scores are very important factors when it comes to getting an FHA loan approved. Do you know what your FICO score is and how it affects your home loan? The U.S. government’s consumer watchdog agency, the Consumer Financial Protection Bureau, has a definition of FICO scores on its’ official site, which includes the following: “A FICO score is a particular brand of credit score. A credit score is a number that is used to predict how likely you are to pay back a loan on time. Credit scores are used by companies to make decisions such as whether to offer you a mortgage or a credit card. They are also used to determine the interest rate you receive on a loan or credit card, and | more...

December 8, 2016

Mortgage Rate Trends: Lower

By Joe Wallace

Mortgage rate numbers have fallen a bit since our last report. The current upward trend has seen some corrections, but Wednesday’s lower rates are inspired by overseas economic developments. Specifically, the European Central Bank(ECB) is set to make an important announcement about tapering-an issue that was a major spoiler in mortgage loan interest rates at home in years past. The ECB announcement has no direct connection to the daily FHA or conventional mortgage rate, but investor behavior often does, and that’s what happened on Wednesday. Investors are placing their money where they anticipate it will do the most good depending on whether the investor believes tapering will happen soon or not. The details of those investment strategies are unimportant for our purposes here; suffice it to say that investor behavior | more...

December 7, 2016

FHA Loans and Credit Report Issues

By Joe Wallace

A reader asks us a question about FHA loans and credit issues this week: “I have applied for a mortgage and I have a judgement on my credit that is part of a class action law suit. Does this judgement affect my chances for getting a mortgage with FHA. Or do I need to pay off this judgement. Is there any exceptions to this situation?” FHA loans are governed by the rules in HUD 4000.1, which include instructions to the lender specifically about judgments. What does the FHA view as a “judgment”? Here’s the definition from the rule book: “Judgment refers to any debt or monetary liability of the Borrower, and the Borrowers spouse in a community property state unless excluded by state law, created by a court, or other | more...

How much can I borrow with an FHA refinance loan?

December 6, 2016

FHA Loan Limits Rise in 2017: How Much?

By Joe Wallace

In a recent blog post, we discussed the news of FHA loan limits increasing in 2017. Every year the FHA/HUD official site releases the data on FHA loan guaranty limits for the new year. These limits can be affected by legislation, housing market conditions, and other factors so an annual update (at the very least) is required to establish limits for the new year. How much with FHA loan limits increase in 2017? The FHA issued a mortgagee letter (2016-2017) that announces both the new limits for low-cost areas and high cost areas alike. According to the FHA official site, the low-cost area FHA mortgage loan guaranty limits for 2017 are set as follows as described in the mortgagee letter: “The FHA national low cost area mortgage limits, which are | more...

December 6, 2016

FHA Appraisals: A Reader Question

By Joe Wallace

“I am getting ready to purchase a home. It has been under contract for 6 weeks. 1.5 weeks out, ‘…there is concern that there may be moisture. Please have a specialist determine if there is no moisture or mold present’. My contractor that will do renovations says there is no mold present; however, ‘his word does not count because he is not a mold specialist’. Now I am 3 days from closing and a mold remediation person is $900 and a week turnaround time. What are my options?” FHA appraisals are an important part of the home buying process, and where corrections are required by the FHA appraiser, those corrections are usually ordered as a condition of loan approval. The reader question doesn’t specify if this was a correction or | more...

What You Need To Know About Your FHA Home Loan

December 1, 2016

FHA Loan Applications in 2017: Are You Ready?

By Joe Wallace

For potential borrowers thinking of filling out FHA loan applications in 2017, there are a number of areas to think about as you prepare. Some potential borrowers are ahead of the curve when it comes to getting financially ready for a major loan application, while others may overlook important areas that need attention long before the loan paperwork is filled out. Do you know how ready you are to fill out that mortgage loan application? One question to ask yourself before the new year arrives is how long youve been planning and preparing for the new loan. Many financial experts advise taking at least a full year to save, budget and research the new loan. Why is research needed? In several ways, doing some research can help you decide what | more...