Articles Tagged With: FHA Loan Approval

March 14, 2024

Is It Time To Buy A Home With An FHA Mortgage?

Some borrowers are not sure if they are truly ready to buy a house with an FHA mortgage. Not in the financial sense. For this article, we do not mean “ready” in the sense that a borrower has saved a down payment, worked hard on credit, and has a budget plan that includes the new mortgage payment. In this article, being “ready” means deciding to stop renting and start owning a home. Running The Numbers Before You Shop Get a calculator ready if you need to answer the rent-versus-own question. Compare the current rental options with the cost of owning. Ask yourself, how much is your rent? What about renter’s insurance, monthly utility expenses, and other costs like parking and trash removal? How does that amount compare to the costs | more...

March 13, 2024

Home Loan Mortgage Insurance Requirements

By Joe Wallace

When it is time to buy a new home, borrowers have important decisions to make about mortgage insurance. Do you know who is required to pay for mortgage insurance and why? There are home loan programs that offer the option of paying 20% down and sidestepping the lender’s mortgage insurance requirements. Other mortgage loans may require borrowers to come up with a larger down payment to take advantage of the option to stop paying mortgage insurance after 11 years. Some mortgages have no insurance guidelines in this area at all. We examine these programs below. What To Know About Conventional Loan Mortgage Insurance There is no national standard for conventional loan mortgage insurance in terms of lender requirements. Borrowers can expect to pay 20% down on a conventional loan to avoid | more...

March 12, 2024

Home Loan Rules New Buyers Should Know

By Joe Wallace

Your participating lender will provide you with loan guidelines, including certain restrictions on the source of your down payment funds. Did you know that FHA loan rules forbid the seller of the home from contributing toward the borrower’s down payment? That is a very important rule a first-time homebuyer should know when thinking about applying for home loans. Seller Assistance With Closing Costs Your seller IS permitted to offer assistance with closing costs, and those funds will be applied to approved expenses related to your home loan. The seller is allowed to contribute up to six percent of the sale price of the home (this amount may be less for some mortgages, like VA loans) toward your closing costs. Incentives To Purchase? But the seller CANNOT provide money above and | more...

March 11, 2024

FHA Loan Down Payment Advice

By Bruce Reichstein

Are you looking for a home loan with a lower downpayment requirement? In 2024, FHA home loans are a smart option to consider in such cases as the housing market slowly tries to recover. These down payments are often lower than their conventional mortgage equivalents, and borrowers who struggle to come up with the 20% down needed to avoid conventional private mortgage insurance, which is required on a conventional mortgage, may find a better option in the FHA loan program. According to the Consumer Financial Protection Bureau, those who don’t pay 20% down on a conventional loan may encounter down payment requirements of up to 15%. “Most lenders offer conventional loans with PMI for down payments ranging from 5 percent to 15 percent.” The Bureau adds that “some lenders may | more...

March 7, 2024

Changes To FHA Manufactured Housing Loans

By Joe Wallace

Did you know that some 20 million Americans live in manufactured housing? Most government-backed mortgage programs offer loans to these borrowers. That includes FHA home loans for manufactured housing, modular houses, and mobile homes. There’s a separate FHA loan for these homes like there are separate FHA condo loans and construction mortgages. The FHA and HUD are working to expand manufactured housing options through the FHA Single-Family Home Loan Program and are offering new options to organizations responsible for multi-family housing. HUD To Increase Availability Of Affordable Manufactured Homes WhiteHouse.gov issued a press release on the federal government’s efforts in 2024, noting, “Manufactured housing is a critical source of affordable housing, especially for low-income, rural, and Native American households and offers a potentially lower-cost pathway to homeownership.” Manufactured housing, also | more...

February 29, 2024

FHA Mortgage Loan Rates And Cash To Close

By Joe Wallace

If you want to buy a home using an FHA mortgage, the required minimum cash to close is one of the things you must plan and save for in the beginning stages of the loan. Some view the rates and costs as being separate…at first. Some borrowers quickly learn that FHA loan closing costs and the interest rate your lender offers may be more related than they realize. Much depends on which options the borrower decides to pursue. FHA Home Loan Closing Costs Your FHA loan cash-to-close requirements include the lender’s fee, your down payment, and other expenses such as the upfront mortgage insurance premium. Some costs you can finance. One is the FHA upfront mortgage insurance premium. Other expenses cannot be added to the loan amount. That said, a | more...

February 22, 2024

Before You Apply For An Adjustable-Rate Mortgage

By Joe Wallace

Are you worried about FHA loan interest rates? If you have decided to explore your home loan options with an FHA adjustable rate mortgage, here are some important details to know while still planning and saving up for the loan. FHA ARM Loans Differ From Conventional ARM Loans An FHAS adjustable-rate mortgage isn’t necessarily the same as a conventional equivalent. Your conventional lender’s occupancy guidelines will vary. Does yours have a requirement that the property securing the ARM loan serves as your home address? FHA ARM loans definitely require this as a condition of loan approval. Occupancy is key in that at least one borrower obligated on the FHA loan must live in the home being refinanced or purchased with an ARM. FHA loan rules on occupancy extend to nearly | more...

February 20, 2024

Before You Close Your FHA Home Loan

By Bruce Reichstein

Once your FHA loan application is approved by your loan officer, is your FHA loan really “bulletproof” until closing day? Some believe that it is, but this is not true, there are many things that could wind up stopping a home loan before closing day. For example, your seller may change their mind and decide not to sell. The house might appraise for a lower amount than the seller asks for, and the borrower ultimately chooses to back out of the deal. There are too many scenarios to count. A home that is damaged or destroyed before the closing day is just one variable. While that may sound extreme, that’s a problem that happens often enough to require provisions in FHA loan regulations to guide borrowers and lenders through. Don’t | more...

February 15, 2024

Home Loans: When To Get Pre-Approved

By Joe Wallace

When should a house hunter choose to get pre-approved for a home loan? It’s a common question many borrowers ask. But this question can be confusing because some use the term “prequalify” interchangeably with “pre-approval”. But these two terms actually mean different things. Getting prequalified for a home loan is something you do early in the house-hunting stages. You are not ready to make any offers, but you want to let sellers know you are not window shopping. Prequalification means the borrower has filled out some basic paperwork with a lender while in house-hunting. It is not loan approval, and borrowers still, at this stage, have a ways to go before loan approval happens, including filling out basic loan application paperwork (not pre-qualification paperwork). Do You Always Need To Pre-Qualify? | more...

February 12, 2024

FHA Loan Costs: Questions Answered

By Joe Wallace

Some borrowers don’t realize they are permitted to finance certain costs into an FHA home loan. This can help save money out of pocket in the earliest stages of the loan, making it easier to afford the basic initial costs of buying property. Adding more to your home loan can make your monthly payments higher, but for some, that may sound like a good trade-off for saving money upfront on the transaction. Some borrowers feel any addition to their baseline monthly payment needs justification and want to avoid adding to the loan wherever possible. Choose any FHA loan add-ons carefully. Be sure to ask the lender about each addition to your mortgage. How will it increase your monthly payment? Can I Finance FHA Required Mortgage Insurance? Yes, but with caveats. | more...