Articles Tagged With: FHA Home Loans

September 8, 2020

What Is An FHA Loan Down Payment?

What is an FHA loan down payment? Most people in the house-hunting process are familiar or will become familiar with down payments-the money required from the borrower upfront which is paid against the principal of the loan. There’s a long-standing notion about the nature of down payments; if a borrower invests a large amount of money upfront, they have a bigger stake in making on-time payments and remaining in good standing on the mortgage loan. But that idea isn’t addressed in the FHA loan rulebook. What is discussed is the nature of the minimum required cash investment or the down payment on an FHA mortgage. All FHA loans for new purchases will require a minimum FHA loan down payment of 3.5% of the adjusted value of the home. Naturally, the | more...

September 1, 2020

One-Time Close Construction Loan Mortgage Payments: What You Need To Know

By Joe Wallace

When do mortgage payments begin on a construction loan? If you are building on your own lot with a VA One-Time Close loan or an FHA OTC construction loan, you’ll want to know what you are liable for and when–and you’ll also want to know how delaying your mortgage payments until the home is complete will affect your monthly payments down the road. VA and FHA mortgage loan options include the ability to build a home on your own land using a VA One-Time Close construction loan or the FHA equivalent. One-Time Close loans allow you to build a house on your own land or purchase land in conjunction with building a home. There is a single application and approval process–these loans are potentially more streamlined and easier to manage | more...

August 28, 2020

FHA Home Loans: How Much Income Do You Need To Qualify?

By Joe Wallace

Many future home owners want to know about the income requirements for an FHA loan–are you worried that you won’t qualify for an FHA mortgage because you don’t earn enough each month? And then there’s the opposite problem–a misconception that you can earn “too much” to qualify for an FHA mortgage as though this program had income limits. FHA loans do NOT feature income limits and this program does not require you to qualify based on financial need. FHA Loans Are For All Financially Qualified Applicants There is no minimum income requirement for an FHA mortgage, and there is no upper limit or income “ceiling”. FHA loans are not targeted for any one income bracket. FHA loans are designed with more lenient FICO score minimums in mind, but that has | more...

August 6, 2020

Who Should Apply For A Construction Loan?

By Bruce Reichstein

Who should apply for a construction loan? There are two basic types of borrowers who should consider doing so–the house hunter who wants to build a house instead of buying someone else’s, and those who want to purchase fixer-upper homes and renovate them. The home loan for borrowers who would rather build their home on their own lot is called a One-Time Close (OTC) construction loan. It features a single loan application for both the construction of the house and the purchase of it once completed. Non-OTC construction loans may required two separate loans–one for the construction phase and one for the purchase of the completed house. This makes the process more complicated and having a single loan is definitely an advantage for the OTC version of these mortgages. OTC | more...

June 12, 2020

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

By Joe Wallace

Low mortgage rates have stolen the headlines on some finance blogs; as a result, 2020 has seen high volumes of refinance loan applications. The low rates also has many renters potentially finding themselves in a more affordable position to become homeowners. But another development has taken things in an even more historic direction; in June 2020 conventional loan rates made big headlines by plunging below the three percent threshold. The sub-three percent range has been familiar territory for FHA mortgage loans and VA mortgages. The same day conventional rates fell below three percent, the best-execution FHA mortgage loan interest rate for a 30-year fixed rate mortgage was reported at 2.50%. The rates offered to any borrower will depend on the type of loan, the loan term, and other variables. Borrowers | more...

Construction Loans For First-Time Home Buyers

May 12, 2020

Building A Home As A New Borrower

By Bruce Reichstein

At press time, many portions of the United States are considering some kind of return to business as usual in the wake of lockdowns and coronavirus containment measures. For better or worse, some portions of the country are opening more than others and this will likely include real estate markets and house hunting as progress is made. And that means some first-time home buyers will be exploring their options soon. Did you know that even as a first time borrower, you may be eligible for a One-Time Close construction loan that allows the borrower to build a home on their own lot rather than buying someone else’s property? One-Time close loans are available for VA borrowers, FHA loan applicants, even USDA borrowers. These loans do require some additional legwork and | more...

May 6, 2020

Home Loan Forbearance Options

By Bruce Reichstein

Are you one of the many Americans in need of mortgage loan forbearance during COVID-19? There are many different types of mortgages; FHA, VA, USDA, conventional…the options available to you may vary depending on the type of mortgage you have, whether you are current on your home loan payments at the time you request the help, and other factors. If you need to apply for mortgage forbearance, it is important to know the range of choices open to you not just for the forbearance period itself, but also for repaying the money you don’t pay now if you are approved. Some loan forbearance options may allow you to choose to stop making payments for up to a full year and choose a method to repay the year’s worth of delayed | more...

February 6, 2020

Buy Or Rent? The Cost Gap Gets Narrower

By Bruce Reichstein

Do you want to own a home or rent one from someone else? According to a Realtor.com report from the fourth quarter of 2019, the cost gap between being a renter and a homeowner is lower, and it may be even more affordable to own your own home in smaller rural areas. Why? According to Realtor.com, “After years of escalating home prices making the cost to purchase a home more expensive than renting in many of the nation’s largest counties, rising rents, lower mortgage rates, and moderating home prices made purchasing a home in Q4 2019 more attractive compared to last year.” That report adds that in more than 80% of American’s largest counties it may still be more expensive to own instead of rent. Findings from the Realtor.com report | more...

June 27, 2019

You Are Not Ready For An FHA Home Loan If…

By Joe Wallace

How do you know you are truly ready for a home loan? There are many things to consider, including your finances, credit, and employment history. But there are other factors, too. You Are Not Ready For An FHA Mortgage If You Don’t Know How Much You Can Afford To Pay Each Month Do you know how much you can afford in a monthly mortgage payment? Don’t forget that calculating your payment isn’t as simple as doing the math on the sale price of the home compared to the length of the mortgage plus interest. You will also have to figure in property taxes, any applicable homeowners or condo owners association fees, mortgage insurance premiums, and other factors. Do not overlook these expenses when doing the mortgage math! You Are Not | more...

April 22, 2019

Lower Home Prices And FHA Mortgages

By Joe Wallace

House prices in 2019 seem to be “at risk” to go lower according to some industry reports. If you are researching home prices (especially for those in housing markets on the West Coast) you may read about these issues being higher than usual for a variety of reasons. How Do Declining Home prices Affect FHA Home Loans? If the value or asking price of a neighborhood is in decline, it may affect certain options you have to negotiate with the seller. Your seller may or may not be willing to negotiate on items like the allowable six-percent-of-the-sale-price contributions toward closing costs the seller can make. Sellers may agree to pay this six percent as an incentive for the borrower to purchase the real estate. But if prices are going down | more...