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Articles Tagged With: FHA Home Loans

January 10, 2013

FHA Streamline Refinance Loans Without An Appraisal

By Joe Wallace

FHA Streamline loans are described in the official rules (HUD 4155.1) as follows: “Streamline refinances • are designed to lower the monthly principal and interest payments on a current FHA-insured mortgage, and • must involve no cash back to the borrower, except for minor adjustments at closing, not to exceed $500.” The no-cash-out rule makes FHA Streamline Refinance loans different than cash-out refinances. Streamline loans may be done with or without an appraisal. According to FHA loan rules, when a Streamline Refinance is done without an appraisal, the following applies: “Generally, the streamline refinance mortgage amount may never exceed the statutory limits, except by the amount of any new upfront mortgage insurance premium (UFMIP).  However, the maximum mortgage may exceed the statutory limits on certain specialty products.” Additionally, there are | more...

 

December 14, 2012

FHA Home Loans: What The Lender Does With Your Application

By Joe Wallace

When it’s time to apply for an FHA home loan or get pre-approved for an FHA loan, there is paperwork that must be completed and submitted to the lender. This can be a bit time consuming and requires more detail than a typical credit card application or similar lines of credit. But what does the lender do with all that information? Why is the borrower required to submit so much detail for a home loan? It’s obvious that the size of the amount has a lot to do with that, but there are rules the lender must follow for these applications that adds to the paperwork reqiurements. According to the FHA official site, “The purpose of the mortgage credit analysis is to determine ? a borrower’s credit performance ? a | more...

 

August 13, 2012

FHA Loan Rules: Co-Borrowers

By Joe Wallace

Some first-time home buyers looking for a home to buy with an FHA mortgage don’t come to the bargaining table alone. The choice to include a co-borrower or co-signer is an important one, and FHA loan rules have guidelines when a co-borrower or co-signer is present. FHA loan rules make a distinction between a co-borrower and a co-signer. What’s the difference? According to FHA loan rules in HUD 4155.1, Chapter Four: “Both occupying and non-occupying borrowers and coborrowers take title to the property at settlement, are obligated on the mortgage note, and must sign all security instruments.” But the rules also say cosigners “do not hold ownership interest in a property”, and while they are obligated on the mortgage note, “have no liability for repaying the obligation, and must complete | more...

 

July 30, 2012

FHA Loan Assumptions: The Basics

By Joe Wallace

What is FHA loan assumption? Loan assumption is where the owner of the home purchased with an FHA mortgage wishes to transfer the loan and ownership of the property to another person, without the new owner applying for a brand new FHA guaranteed mortgage or conventional loan. According to the FHA official site, “All FHA-insured mortgages are assumable.

 

June 13, 2012

Reader Question: FHA Loan Credit Requirements

By Joe Wallace

A reader asks: “The FHA approves people with poor credit. I see on the website that FHA is getting home loans, can you tell me what are your credit guide lines?” FHA loan rules establish minimum credit requirements for loan approval, but borrowers should know that it’s a mistake to assume an FHA guaranteed mortgage is a “bad credit home loan” or similar products. Banks that participate in the FHA loan program have their own credit requirements–they are not forced to issue home loans to borrowers that don’t meet the financial institution’s minimum credit score requirements for home loans even if the borrower technically meets the FHA minimum credit score cutoff. That’s one reason why borrowers are encouraged to contact the FHA directly (1-800-CALL FHA) to learn about and arrange | more...

 
FHA Home Loan Basics

March 13, 2012

FHA Offers Advice on Foreclosure Relief Scams

By Joe Wallace

A recent FHA/HUD effort in Atlanta to raise awareness about foreclosure scams offers good advice for borrowers anywhere in the United States. The FHA/HUD campaign “Know It. Avoid It. Report It.” recently ran in Atlanta during National Consumer Protection Week, March 4

 

March 6, 2012

Reader Question: FHA Loan Rule Changes On Collection Actions

By Joe Wallace

In a recent blog post we reported the FHA’s announced changes to its rules concerning collections, court judgments, and payoffs of those actions. FHA mortgagee letter 2012-3 published new instructions for FHA lenders added to HUD 4155.1 .4C.2.E. which now says, “If the total outstanding balance of all collection accounts is equal to or greater than $1,000 the borrower must resolve the accounts (e.g. entered into payment arrangements with minimum three months verified payments-paid as agreed) or paid in full at the time of, or prior to closing.