Articles Tagged With: FHA Loan Application

March 5, 2013

FHA Loans and Refinance Loans: Interest Rates and Fees

What do you, the borrower, need to know about FHA loan fees for new purchase mortgage loans and home loan refinances? It’s a big issue, but there are some basics to understand as you’re planning your next move in the search for a new home or a refinance loan rate. First, the FHA does not set interest rates on refinance loans or mortgage loans. It does require them to be appropriate, reasonable and customary for the market, but the job of negotiating interest rates is one the borrower and lender work on together. The FHA loan rulebook says as much in Chapter One of HUD 4155.1: “Under all currently active FHA single family mortgage insurance programs, the borrower and the lender negotiate the interest rate and any discount points.” Another | more...

March 1, 2013

Sound Advice From the FHA on Buying A Home With an FHA Mortgage

By Joe Wallace

If you’re thinking about buying a home with an FHA guaranteed mortgage, now is a very good time to explore your options. Mortgage loan rates may have risen slightly from their “all-time lows” of the past 12 months, rates are still very good, and the housing market recovery makes purchasing a home more attractive than ever. What kind of advice does the FHA official site offer to house hunters thinking about that first FHA home loan application? There first thing to ask is whether you are ready to commit to buying a home now, or if you need to take some additional preparation time. How do you know if you’re ready to commit? According to the FHA, “You can find out by asking yourself some questions: – Do I have | more...

February 28, 2013

FHA Loan Requirements and Your Personal Data

By Joe Wallace

We sometimes get questions about certain practices required to verify and approve the information given on a borrowers FHA home loan application. Borrowers are rightly concerned about protecting their privacy and personal data; what do FHA loan rules say about lenders who ask for account numbers, Social Security information and other private information? FHA loan applicants should know that the FHA does require these types of personal data in order to properly verify and approve the loan. According to FHA loan rules as described in HUD4155.1: “The lender may ask the borrower to sign a general authorization form that gives the lender blanket authority to verify information needed to process the mortgage loan application, such as • past and present employment records • bank accounts and • stock holdings.” FHA | more...

February 25, 2013

FHA Loans, Prepayments and Due-On-Sale Clauses

By Joe Wallace

When shopping for a home, some borrowers come into the house hunt with a strategy that includes paying or pre-paying a chunk of the mortgage loan up front. This isn’ necessarily a down payment per se, but it is something to consider when setting a budget for a home loan and the anticipated mortgage loan payments. Does the FHA allow such a strategy? Can borrowers pay down the loan principal? FHA home loans do feature the ability to pre-pay a portion of the loan. This can be helpful for many reasons including lowering mortgage payments and saving money over the lifetime of the loan by reducing the principal and the amount of interest paid on that principal. According to HUD 4155.2 Chapter Three, Section A, “A borrower may prepay a | more...

February 21, 2013

FHA Refinance Loan Questions: Credit Requirements

By Joe Wallace

A reader asks, “My divorce was final last March. My ex got the house. He’s suppose to be getting it refinanced but has been turned down twice for the Streamline. What are we missing? It was “transferred” to him through divorce, he has all documents showing he’s made the payments since we bought the house 5 years ago to present. And what’s the “non-credit” qualifying requirement? From what I’ve read, he should be good to go with that but the lenders, or lack thereof, keep turning him down due to debt/income ratio.” Reader questions like these are common; unfortunately there are too many variables that could affect a refinance loan application to answer this reader’s query specifically. What variables could be at work in situations like these? Any number of | more...

February 12, 2013

New “Final Rule” On Housing Discrimination Standards

By Joe Wallace

The FHA and HUD have a new yardstick to measure housing discrimination and take appropriate action where needed, according to a recent press release issued by the Department of Housing and Urban Development. According to the press release HUDNo.13-022, HUD is “issuing a final rule to formalize the national standard for determining whether a housing practice violates the Fair Housing Act as the result of discriminatory effect.” “Through the issuance of this Rule,HUD is reaffirming its commitment to enforcing the Fair Housing Act in a consistent and uniform manner,” said HUD Secretary Shaun Donovan. “This will ensure the continued strength of one of the most important tools for exposing and ending housing discrimination.” As the press release states, HUD is “statutorily charged with the authority and responsibility for interpreting and | more...

February 8, 2013

FHA Loan FICO Score Requirements: A Reader Question

By Joe Wallace

A reader asks, “My credit score is 678. When my husband tried to get his FICO score, he was told he couldn’t because he did not meet the minimum scoring requirements. (He is just starting to build credit and has nothing). Will we be able to qualify for an FHA loan based on my credit score?” FHA loan rules have a lot to say on this. In HUD 4155.1, you’ll find the following under the section titled Analyzing The Borrower’s Credit: “Neither the lack of credit history nor the borrower’s decision not to use credit may be used as a basis for rejecting the loan application. We also recognize that some prospective borrowers may not have an established credit history. For those borrowers, and for those who do not use | more...

February 5, 2013

FHA Announces Changes To HECM Loan Program

By Joe Wallace

The FHA has issued a press release and Mortgagee Letter describing changes to the FHA Home Equity Conversion Mortgage (HECM) program. According to the FHA official site, the FHA will merge certain options associated with the HECM program and the FHA HECM Saver program as described below: “…FHA will consolidate its Standard Fixed-Rate Home Equity Conversion Mortgage (HECM) and Saver Fixed Rate HECM pricing options. This change will be effective for FHA case numbers assigned on or after April 1, 2013. The Fixed Rate Standard HECM pricing option currently represents a large majority of the loans insured through FHA’s HECM program and is responsible for placing significant stress on the MMI Fund.” The FHA press release adds, “To help sustain the program as a viable financial resource for aging homeowners, | more...

February 4, 2013

FHA To Increase Mortgage Insurance Premiums

By Joe Wallace

In the last week of January 2013, the FHA issued a statement announcing an increase in annual mortgage insurance premiums or MIP for its single family home loans. According to the FHA official site, “FHA will increase its annual mortgage insurance premium (MIP) for most new mortgages by 10 basis points or by 0.10 percent.” The FHA is also increasing the annual MIP for FHA Jumbo Loans, which are defined as mortgages at $625,500 or more, “by 5 basis points or 0.05 percent, to the maximum authorized annual mortgage insurance premium.” The FHA also says the increases mentioned here are excluding “certain streamline refinance transactions.” This change takes effect for FHA loans with case numbers assigned on or after April 1, 2013, with certain exceptions as granted by the FHA | more...

January 31, 2013

A Reader Question on FHA Minimum Property Requirements

By Joe Wallace

A reader asks, “Would a home that is missing just the cabinet doors in the kitchen qualify for FHA? It has the everything else, its just the doors that are missing.” From time to time we get questions like these that reference specific conditions in a home. Will X make my home ineligible for an FHA mortgage? Does Y disqualify the property? In answering these questions there are two important aspects to consider. One is whether or not a specific condition is described in FHA minimum property standards. Some are, but many more are not. For example, a home located in certain flood zones may not qualify for an FHA mortgage. A home with standing puddles of water in the basement or a leaky roof may require corrections or repairs | more...