Articles Tagged With: FHA Home Loan

August 3, 2023

Researching Your FHA Home Loan

If you are a first-time FHA home buyer, there are important resources that can help you make smart choices in the earliest stages of the loan. Some of those resources come from your local real estate agent or lender, but more help can come from the FHA itself. Do Some Early Research If you include some time to research home loans in the early stages of being a first-time homebuyer, along the way you’ll likely find some information that sounds good but doesn’t really apply to you. One example comes by way of those financial commentators warning first-time home buyers away from VA and FHA mortgages. Their argument? FHA or VA loans might cost you thousands more than other mortgage loan options. The argument goes something like this. “First-time home-buyer | more...

July 27, 2023

Buying A Home? Questions For Your Lender

By Joe Wallace

If you have never purchased a home before, you might be wondering how you can improve the overall experience, get good advice, and make a more informed decision on purchasing a house. One way to do that is to compare lenders (five is a good number) and ask some important questions of each one. Ask Your FHA Lender Which Loans Are Most Popular Some lenders have a lot of interest in some loans and none at all for other FHA loan options. Ask each lender, “What are the most popular mortgages you offer. Why are they so popular?” If the lender can’t offer the type of loan you need, you will need to move on. Not all lenders offer all FHA loans. Some lenders won’t issue manufactured home loans, others | more...

July 25, 2023

Which FHA Loan Is Right For You?

By Bruce Reichstein

There are some home loan options some won’t consider. A shorter loan term is one. In an era where lower monthly payments seem to be the priority for some borrowers more than saving money over the entire course of the loan, a longer loan term makes sense. But for some, these are essential aspects of the loan to consider. If you can afford to pay more each month on your mortgage, would you do so to shorten your loan term? FHA Condo Loans, FHA Manufactured Homes Are you surprised there are separate FHA loans for each property type listed above? These different loans are needed simply because each property type’s considerations differ. Manufactured homes can’t be older than regulations allow, but existing construction homes don’t have the same rule. Condo | more...

July 14, 2023

FHA Loan Options To Consider

By Joe Wallace

There are many options for those who want to buy or refinance a home using an FHA mortgage. Did you know that FHA loans feature a choice between fixed and adjustable rate loans, and that you can add energy efficient features to the home you buy or refinance? These options and many more are option to qualified borrowers who get approved for FHA mortgages. The choices you have with a new purchase FHA loan are varied. In addition to the type of loan–fixed rate mortgage, adjustable rate mortgage, growing equity mortgage loans and others–you also have a choice of housing available to you under the FHA loan program. You can select a typical suburban home, but are not limited to doing so. FHA Loan Types: Condos, Manufactured Homes There are | more...

June 30, 2023

Is an FHA Home Loan Right For You?

By Joe Wallace

Mortgage loan interest rates have increased significantly since hitting all-time lows in years past. In 2023, some renters are now wondering whether it’s smarter to rent or own in the current housing market. Some can afford to wait to buy until the rates return to a consistently lower range, but others have to buy soon, no matter what the state of the housing market. FHA Loans Versus Conventional Loans And for these borrowers, FHA loans, being government-backed, often feature interest rates and terms competitive with some conventional alternatives. They can also be competitive with conventional loans when it comes to terms. No penalty for early payoff, the ability to refinance with an FHA Streamline should conditions make that option more viable, and a lower down payment requirement are all features | more...

June 26, 2023

Is It Possible To Have Multiple FHA Loans?

By Joe Wallace

Many people want to know if they can apply for more than one FHA loan at a time. In some cases this is because the potential borrower wants to buy a home they don’t intend to use as their primary residence. In others, the issue might be that a larger home is needed due to a change in family size. Are these reasons for having more than one FHA loan valid under FHA loan rules? What FHA Loan Rules Say FHA loan rules for the single-family home loan program in the FHA Single-Family Handbook generally permit FHA loans only for owner-occupiers. The short answer to the question, “How many FHA loans can I have at the same time?” is ONE. The home must be occupied by at least one person | more...

June 22, 2023

FHA Loan Rules For Income: Investments, Trusts, and Promissory Note Payments

By Joe Wallace

Part of the FHA loan approval process involves the lender verifying an applicant’s income. FHA rules state that for purposes of calculating a borrower’s debt-to-income ratio, only verifiable income can be counted in that ratio. Do FHA rules allow a borrower’s interest or dividend payments from investments to be counted as verifiable income? For some borrowers, this can be an important question. According to the FHA Lender’s Handbook, “The Mortgagee must verify and document the Borrower’s Investment Income by obtaining tax returns for the previous two years and the most recent account statement.” Additional instructions to the lender for this issue include the requirement that when making the calculation. “The Mortgagee must subtract any of the assets used for the Borrower’s required funds to close to purchase the subject Property | more...

June 16, 2023

FHA Loans For Mixed-Use Property

By Joe Wallace

A common reader question about FHA mortgages has to do with purchasing mixed-use property with an FHA loan. Here is a variation on the theme: “I want to buy a 4-unit building with a store front. Is there any type of loan that I can apply for to make this purchase?” The good news is that this type of purchase may be possible; FHA loan rules permit the purchase of properties between one and four units. For mixed-use property, commercially zoned residential property or other non-traditional purchases, HUD 4000.1 states: “The non-residential portion of the total floor area may not exceed 49 percent. Any non-residential use of the Property must be subordinate to its residential use, character and appearance.” “Non-residential use may not impair the residential character or marketability of | more...

Conventional Loan Interest Rates Make History, FHA Loan Rates Still Incredibly Low

June 15, 2023

FHA Loans and Interest Rates: The Interest Rate Lock

By Joe Wallace

Under the rules of the FHA loan program, borrowers and lenders negotiate together on interest rates for the FHA loan. Part of those negotiations is the interest rate lock agreement. This can feel intimidating for some who aren’t used to the home-buying process, but it’s a common part of the home loan transaction. What do you need to know about FHA home loan rates and getting a rate lock commitment from your lender? The FHA does not set interest rates, and it’s also not responsible for regulating them aside from a general requirement that the rates be comparable to similar types of loans. Interest rates on mortgages and other high-value transactions are under more scrutiny in 2023 due to continued elevated mortgage rates. At the moment, it’s good to explore | more...

June 12, 2023

Is Summer The Best Time For House Hunting?

By Joe Wallace

When is the best time of year to search for your new home? Spring and summer are the most comfortable times to look, but those who put up with a little inconvenience from the cold and late-year inclement weather may save more than they realized thanks to a more eager seller. It always pays to look for a home when the buying season is in full swing, but you may have more options than you think by extending your house hunt into fall and winter if necessary. Buying A House During House Hunting Season (Spring and Summer) Yes, the weather is better, potential buyers can take a leisurely look around the property, and the overall experience may be more pleasant. But there is more competition for homes in the good | more...