Articles Tagged With: FHA Home Loan

December 1, 2016

2017 FHA Appraisal: When Do You Need One?

If you aren’t sure whether you need a 2017 FHA appraisal, there may be a very simple answer depending on what kind of home loan or refinance loan you are seeking. For all “forward mortgages” including new construction, proposed construction, or existing construction loans, an FHA appraisal will be required. New purchase loans or forward mortgages require the lender to establish the fair market value of the property to be purchased. That’s where the appraisal comes in. An FHA appraisal establishes the fair market value and insures the home meets basic, minimum standards. The lender will calculate the loan amount based on either the fair market value of the home established in the 2017 FHA appraisal or the asking price of the home, whichever is lower. For new purchase loans, | more...

Will My Home Loan Application Be Approved?

November 30, 2016

2017 Home Loans: Is Your Holiday Spending A Factor For An FHA Loan?

By Joe Wallace

Holiday credit card use tends to spike, and those considering 2017 home loans should take this into account when planning for a new mortgage loan application. Your credit card debt affects your debt-to-income ratio, which the lender will calculate at application time. That ratio, called DTI for short, is a very important factor in home loan approval. For some borrowers, the amount of credit card debt, even holiday spending, isnt as much of a problem as timely payments. Some consumers are tempted at holiday time to skip payments in order to free up some much-needed cash, but a missed payment within 12 months of your FHA mortgage or refinance loan application is not a good thing. Financial experts recommend borrowers maintain on-time payments with no late or missed payments for | more...

November 15, 2016

FHA Refinance Loans and HECM Reverse Mortgages

By Joe Wallace

There are two types of FHA loans borrowers should know about when considering their refinance loan options. One is a traditional cash-out or no cash-out refinance loan, and the other is a reverse mortgage, also known as an FHA HECM loan. HECM stands for Home Equity Conversion Mortgage. The standard refinance loan and FHA HECM options are very different and serve different needs, but depending on the borrower it may be good to be familiar with both. Typical FHA refinance loans involve situations where the borrower typically has an existing mortgage and applies for a new loan that pays off the original mortgage, creating a brand new monthly payment, loan term, etc. Depending on the terms of the loan cash back may or may not happen, but for cash-out refinancing | more...

FHA Loans And Natural Disasters: What You Should Know

November 15, 2016

FHA Loans And Debt: A Student Loan Question

By Joe Wallace

A reader asks, “I am a mother who is on a fixed income of $1600.00 a month in ft laud. my son is going to be the co borrower who lives and works in LA. Makes a good salary. We already got pre-qualified up to 300k, our credit score is above 680…question is my son has student loan of 33k and is in forbearance until next year. Will this be a problem with (an) FHA loan?” FHA loan rules in HUD 4000.1 instruct the lender on how to view debt, debt ratios, and the kinds of debt known as “deferred obligations” which may not affect the borrower’s debt to income ratio in the short term, but can do so after a home loan has closed. Sometimes, FHA loan approval may | more...

November 14, 2016

What Kind Or Refinance Loan Do You Need?

By Joe Wallace

Buying a home is sometimes only the first step in a larger financial journey-if you purchase a home with a conventional, VA, FHA or other type of mortgage loan, you might not be thinking about refinancing. But it’s an option that can be helpful in a variety of ways, especially if you understand how FHA refinance loans work. Choosing the right refinance loan is an important part of the process. Existing FHA mortgages have a refinance option that allows the borrower to get into a lower interest rate/monthly payment. This option is called the FHA Streamline Refinance mortgage and has no FHA-required appraisal or credit check. Depending on lender standards you may need one or both regardless, but the lender is free under FHA loan rules NOT to require them. | more...

November 10, 2016

FHA Good Neighbor Next Door Loans

By Joe Wallace

A reader asks, “Im active duty military stationed overseas with 2 years left on my tour, and I’m interested in buying a home in my state or record to return to. If I take leave and occupy the house multiple times throughout the year, and have family watch it. Am I able to qualify under the FHA Good Neighbor Next Door Program? Or is that unlikely? The FHA Good Neighbor Next Door program is described on the FHA official site: “The Good Neighbor Next Door (GNND) sales incentive permits an Owner- Occupant Borrower who is a full-time law enforcement officer, teacher, firefighter, or emergency medical technician who meets HUD requirements to purchase a specifically designated HUD REO Property located in a HUD- designated revitalization area with FHA-insured financing at a | more...

Buying A Fixer-Upper With An FHA 203(k) Rehab Loan

November 4, 2016

High Voltage Lines and FHA Loans

By Joe Wallace

A reader asked a question recently about high voltage transmission lines and the FHA loan rules that address them in relation to the property to be purchased with an FHA mortgage. “I am looking to find info regarding High Voltage Transmission Lines. I know that in 4150.2 that it clearly states that the dwelling or other improvements can not be within the fall zone. However I am not locating this info in more updated references. Can you help with me finding this info?” FHA loan rules were updated in HUD 4000.1, and have since replaced many older references. According to the FHA/HUD official site, “The Federal Housing Administrations (FHA) Single Family Housing Policy Handbook 4000.1 (SF Handbook) is a consolidated, consistent, and comprehensive source of FHA Single Family Housing policy”. | more...

November 2, 2016

Down Payment Rules: An FHA Loan Question

By Joe Wallace

A reader asks, “I’m buying a home for 160,000 and the seller is paying up to 4000 in closing costs and pre-paids (which the closing cost ended up only being 3,525 because the lender required me to pay for the appraisal outside of closing POC) I also put 500 earnest money down.” “They are telling me that I have to bring 5,100 to closing instead of 4,625 because they said that I have to bring a total of 3.5% (5600) and the 475 that I already prepaid can not go towards my total 3.5% down. I thought that because I put 500 earnest money deposit and paid for the appraisal outside of closing and the seller is paying for all my closing costs, that I would be able to use | more...

October 31, 2016

Mortgage Rates: Friday Recovery

By Joe Wallace

Since our last report, rates have remained in an upward trend, but Friday saw a bit of relief after a spike on Thursday. Mortgage rates have been moving upward, hitting their highest levels in many months, but they are still below four percent even with the current trend. Some market watchers blame bond market weakness for at least part of this upward trend, but there have been important economic developments abroad (Many have been keeping watch on European Central Bank news) and at home (scheduled economic data releases and news from the Fed) that have also contributed to the current rate environment. Friday rates recovered a bit, reflected in closing costs for many rather than an actual change in the best-execution rates reported here. 30-year fixed rate conventional mortgages are | more...

October 24, 2016

Mold Standards: An FHA Loan Question

By Joe Wallace

A reader asks, “Does the EPA or the FHA have the responsibility for setting the TLVs for mold spores in the air? What if the mold count is higher outside than inside?” The FHA does not set or regulate such health issues, deferring instead to federal, state, or local authority where applicable. According to the Environmental Protection Agency’s official site, we learn the following about mold as it relates to exposure in buildings (in general): “Is sampling for mold needed? In most cases, if visible mold growth is present, sampling is unnecessary. Since no EPA or other federal limits have been set for mold or mold spores, sampling cannot be used to check a building’s compliance with federal mold standards. Surface sampling may be useful to determine if an area | more...