Timely news, information and advice concentrating on FHA, VA and USDA residential mortgage lending.

Vimeo Channel YouTube Channel

Articles Tagged With: FHA Loan Approval

FHA mortgages and refinance loans

FHA 203(k) Rehab Loan Program Updates

Changes are coming for those interested in remodeling a home with an FHA rehab loan. The Department of Housing and Urban Development, along with the Federal Housing Administration, have updated policies associated with the FHA 203(k) Rehabilitation Mortgage Insurance Program. These changes were implemented to modernize the program and make it a more helpful tool for individuals and families seeking affordable financing options for home renovation or rehabilitation projects. The FHA 203(k) program offers two loan variations: a “standard” 203(k) for major remodeling projects that may or may not include work on load-bearing walls. A “limited” 203(k) is available for smaller projects and for what the FHA determines to be “non-structural repairs.” Several fundamental changes have been made to aspects of the FHA 203(k) program. First, the total rehabilitation costs | more...

 
FHA Mortgage Loan

FHA Appraisals: When Are They Required?

When is an FHA appraisal required? For any FHA purchase loan, you will be expected to pay for an FHA appraisal, even if it is an after-improvements approach for renovation refinance loans or similar options. We examine the other situations where an assessment may be needed below. FHA Streamline Refinance An FHA streamline refinance loan does not require an FHA appraisal. These refinance options are meant to provide a tangible benefit to the borrower through a lower monthly payment, a better interest rate, or switching to a fixed-rate loan from an adjustable-rate mortgage. Your participating lender may require an appraisal, which is permitted under FHA loan rules. However, no FHA requirements for appraisals exist for streamline refi loans in typical cases. FHA Reverse Mortgage Refinances FHA reverse mortgages, also known | more...

 
FHA loans

Home Equity Loans: The FHA Reverse Mortgage

The FHA Home Equity Conversion Mortgage (HECM) loan is a home equity loan option for qualifying borrowers 62 or older. There are no monthly payments on an FHA HECM. The borrower can get cash back on the transaction, and the loan is typically due in full when the borrower dies or sells the home. Qualifying HECM borrowers are, once their loan application is approved, able to withdraw “a portion of your home’s equity to use for home maintenance, repairs, or general living expenses,” according to the FHA and HUD official site.  You can also apply for an FHA reverse mortgage to purchase a primary residence, but you must use your own cash to make up any difference between FHA HECM funds, the sale price, and any associated closing costs.  HUD.gov | more...

 
FHA Home Loan

Planning Your First Home

Are you looking for your first home? Applying for an FHA loan might seem intimidating, but there are some things you can do to help reduce those feelings of being overwhelmed by unfamiliar details. This is especially true in an age of confusing information about changing interest rates, modified credit qualifying standards, and options to save your home if disaster strikes. Start Early The key is to start early and plan ahead. Before you fill out loan application paperwork, consider making your planning phase for the loan last a year or more. This takes some immediate pressure off borrowers to save up for the down payment and closing costs. It also provides adequate time to work on your credit and cut your monthly debt. What other things can first-time home | more...

 
FHA Home Loan

How To Qualify For An FHA Mortgage

It’s likely the most commonly asked question about FHA loans. “How do I get approved for an FHA mortgage?” The answer starts with some numbers, but there are other important factors to remember. It’s not all about FICO scores, though they play a significant part in the lender’s decision to approve or deny a loan. FHA Loan FICO Score Requirements For Home Loan Approval If your FICO scores fall between 500 and 579, FHA loan rules say you must pay 10% down, assuming lender standards allow loan approval for those scores. Applicants with FICO scores of 580 or higher are required to make a 3.5% down payment. However, FICO scores aren’t the only factor that influences loan approval. Stable Income Rules If you are a typical college graduate, depending on | more...

 
Buying A Home with an FHA Loan

What You Can Do With Your FHA Home Loan

Borrowers sometimes assume things about home loan programs that aren’t entirely accurate. In the same way some assume that FHA single-family home loans can be used to buy an investment property (they cannot) or that the FHA loan program requires you to be a first-time home buyer, there are flawed assumptions about the kinds of home you can buy with an FHA mortgage and the acceptable uses of these home loans. FHA Loans To Build A Home The FHA One-Time Close construction loan is what borrowers choose when they want to build a home from the ground up. These FHA mortgages also allow land purchase with the loan if you don’t already have it to build on. FHA Loans Can Be Used To Install A Home FHA loans can be | more...

 
Is your credit ready for an FHA loan?

FHA Home Loan Planning

If you want to buy a house with an FHA mortgage, there are some simple steps to take as soon as possible in the planning and house-hunting stages. There are also a few things to avoid, as we examine below. Budget And Save Money Early Smart borrowers build in some extra funds to cover unexpected costs toward owning a new home. You likely don’t expect the appraisal to include instructions on dealing with evidence of termites or what the FHA calls “wood-destroying pests.” Some wind up paying for or negotiating with the seller to pay for an exterminator.  This is just one example of unexpected costs you may need to pay on your way to owning your own home, and adding some extra money just in case is a smart | more...

 
Home Loans

What To Look For When House Hunting

If you are looking for your first home, there are areas of every house you should consider including in your mental checklist of features to look at during a real estate open house or a private viewing of a sale property. What follows is not a complete list but a great place to start when looking for potential deal-breaker problems lurking in the house you want to purchase with an FHA mortgage. The Condition Of The Walls And Ceiling Homes that have been flooded or experienced significant plumbing issues could have signs of water damage in areas like the basement, stairs, and walls throughout the house. Look for stains, patches of wall that don’t quite match the others, warped wood, poorly closed doors, etc. Staining and the smell of mold | more...

 
Mortgage Trends

Home Loan Interest Rate Trends For Summer 2024

Should house hunters dive into today’s housing market? Or is it safer to wait until rates have fallen a bit further? Yahoo! Finance published a mortgage rate report in June of 2024, and that report includes a prediction that home loan interest rates could (as stated by Fannie Mae) remain in the 6% range for the rest of 2024. That affects conventional mortgages, FHA loans, and even need-based mortgages like those offered by the USDA. According to the article, Fannie Mae “predicts 30-year fixed rates will be 6.7% at the end of 2024.” That’s better than the May forecast when Fannie Mae predicted home loan rates could hit 7% by year’s end. The Yahoo! Finance article points out that home loan interest rates are coming down, but slowly over time. | more...

 
FHA Home Loan

Before You Buy Your First Home

FHA home loans have a down payment requirement, the same as many other home loans. Earnest money is also an important early financial consideration. Planning and saving for both are part of the loan process, and you want to start as early as possible. Below, we examine some common issues related to both down payments and earnest money. What To Know Earnest Money And Down Payment Money Earnest money is paid at offer time. You do not pay earnest money at closing time. A down payment is made on closing day in addition to closing costs. Earnest money is paid into an escrow account. In the event that an FHA loan is canceled, the earnest money may be refunded to the borrower in the right circumstances, such as when the | more...