Articles Tagged With: FHA Loan Approval

October 30, 2023

Using Downpayment Assistance With Your FHA Loan

If you want to offset higher interest rates when buying a home, it may be worth your time to investigate your options for a local downpayment assistance program. These are offered in your state, not by the FHA or HUD. Buying a home using downpayment assistance can help you save more upfront on the mortgage but can also be an advantage because you can use the money saved for the downpayment in other areas for your new home instead. Using a DPA may also help you to hang on to more of the money you saved for the downpayment to use toward mortgage payments. It’s a smart idea to pay more than the minimum due each month. It helps you save money over the term of the mortgage. But what | more...

October 27, 2023

FHA First Time Home Buyer Loans

By Bruce Reichstein

How can the FHA home loan program help first-time home buyers? Some perks of an FHA mortgage are central to the home loan program itself, while others may be offered by lenders as an incentive to use that financial institution for your FHA home loan. FHA Home Loans For First-Time Buyers: Low Down Payments The FHA home loan program requires only 3.5% minimum for borrowers with qualifying FICO scores. FHA loan requirements say FICO scores as low as 580 can technically qualify for the lowest down payment, but you will need to check with a participating lender to see what standards may apply above the FHA minimums. Those with credit scores lower than 580 may still technically qualify for an FHA mortgage loan but at a higher down payment. FHA | more...

October 24, 2023

Get A Free Credit Report Before Applying For An FHA Loan

By Joe Wallace

Are you considering an FHA mortgage, an FHA refinance loan, or even a reverse mortgage? It is essential to take the right amount of time to prepare for your FHA loan before filling out the application, and that means knowing what your credit report says long before you start the process. You want to know the contents of your credit report to ensure there is no identity theft, inaccurate information, or other problems. However, many borrowers don’t know how to get copies of their credit report. Free Credit Report From Major Credit Reporting Agencies All consumers are entitled to a free credit report every 12 months. This report is available from each of the three credit reporting agencies. Those agencies are Equifax, TransUnion, and Experian. The U.S. government’s Consumer Financial | more...

October 19, 2023

HUD Announces Accessory Dwelling Unit Policy

By Joe Wallace

The Federal Housing Administration defines an ADU is “a single habitable living unit with a means of separate ingress and egress that meets the minimum requirements for a living unit.” And now, FHA borrowers can get consideration for ADUs and possible rental income associated with them. Accessory Dwelling Units Some homes come with ADUs, others are purchased without them and they are added later by the new owner. Why are ADUs such a potential factor in home loan approval? Because now, FHA loan rules allow borrowers to apply for a mortgage to buy an owner-occupied single-family home with or without ADUS. But when they are present or scheduled to be added, FHA loan rules now permit the lender to consider possible rental income from these units as qualifying income for | more...

October 13, 2023

FHA Home Loan Approval And Your Income

By Joe Wallace

Some important financial issues can derail your FHA home loan application. They include missed housing payments, FICO scores that don’t meet lender standards, or a lack of time in the job market. These are all factors that can lead to a “no” from a lender. But there’s a “new” wrinkle. Insufficient income–not a new problem, obviously, as many aspire to buy a home but can’t afford it yet. But it is a trending issue in ways that make some financial pundits sit up and take notice. According to CNBC, insufficient income is a problem is a major reason why some loan applications get rejected in 2023. Rates And Mortgage Payments Higher In 2023 Home loan interest rates were flirting with the 8% range at the time of this writing, and higher rates | more...

October 10, 2023

Common FHA Home Loan Questions

By Bruce Reichstein

Got questions about the FHA home loan journey? You are not alone. Many first-timers and experienced house hunters have questions about FHA mortgages. Here are some of the most popular. When reviewing these answers, don’t forget that some issues related to FHA loan approval are circumstantial. Your loan application is typically handled on a case-by-case basis, so it’s smart to assume your circumstances may be unique depending on what the issue is. It always helps to talk to a participating FHA lender. How Much Do I Need To Save For An FHA Home Loan? Expect a downpayment minimum of 3.5% of the sale price of the home. You should also expect to save between 2% and 6% of the total loan amount for closing costs. If you want to know | more...

October 6, 2023

Buying A Home In A Difficult Housing Market

By Joe Wallace

Do you plan to buy a home in 2024? If you are currently planning and saving for your loan, you likely have seen headlines predicting a tough market in the coming months. According to a 2023 article published by CNBC, home prices are expected to keep rising in 2024. Those are observations based on real estate forecasts from the National Association of Realtors and federal agencies. What should you know about buying a home as we head into 2024? In some cases it may be a simple matter of adding extra time into your home loan process for planning and saving. For others, it may be a matter of choosing the right type of mortgage loan. For example, instead of competing for a limited inventory of existing homes, some applicants | more...

October 3, 2023

How FHA Loans Differ From Other Government-Backed Mortgages

By Joe Wallace

There are several government-backed mortgage loan programs including FHA mortgage loans, VA loans, and USDA mortgages. What makes FHA mortgages different than VA or USDA home loans? How FHA Home Loans Work The FHA does not lend money to borrowers. Instead, it allows third party lenders who meet FHA standards to underwrite and process FHA mortgage loans, which have a percentage of the mortgage guaranteed by the government. That makes the potential losses to the lender lower should a borrower default on the mortgage. FHA home loans have lower credit score requirements, feature lower required down payments, and have borrower-friendly rules such as a requirement that there be no financial penalty for early payoff of the mortgage. FHA loans are backed by the government, making them a better deal for | more...

Home Buying, FHA Loans, And Mortgage Trends

October 2, 2023

Money, Planning, And Your FHA Mortgage

By Joe Wallace

Some borrowers need help getting ready for the unexpected during the home-buying process. The unexpected can come in the form of a seller deciding they no longer want to sell the property, the borrower losing a job while the loan is on the way to closing day, or other issues. But more mundane, unexpected things crop up along the way, such as certain fees and expenses situationally related to buying a home. Not all borrowers have to pay them, but when circumstances require it, paying for unexpected contingencies like compliance inspections or hazard insurance may require you to be more creative with your finances. Do you have a contingency plan for those compliance inspections, pest control, hazard insurance, or initial property taxes that need to be settled before the home | more...

September 26, 2023

Who Gets Involved In Your FHA Home Loan?

By Joe Wallace

Buying a home with an FHA loan involves more than just three people; the buyer, the seller, and the participating lender’s loan officer. Third parties are typically involved in your transaction as you make your way to closing day and home ownership. Who are these third parties and why do you need to know them? They can include title companies, home inspectors, pest control, and real estate agents. Knowing the service providers are in your area is key since you will need to compare services and prices before you commit. Title Search For The House You Want To Buy A title search is a crucial step in the home buying process. Don’t buy a home without a title search as you need that process to tell you if there are unresolved | more...