Articles Tagged With: FHA Loan Limits

June 16, 2011

Can I Use a Power of Attorney For an FHA Home Loan?

There are many situations where borrowers, co-borrowers or family members might need to use a power of attorney to continue financial arrangements, including an FHA home loan. Some borrowers or their family members, acting on behalf of someone who can’t represent themselves, may furnish a power of attorney (POA) to continue a financial arrangement or give final approval. One popular use for a power of attorney is when a military member is suddenly deployed or sent on a military assignment on short notice. The purchase of a new home shouldn’t be cancelled on account of an important job requirement–if the person is willing to let someone else represent him or her using a power of attorney. When it comes to FHA home loans, the rules state, “A power of attorney | more...

June 13, 2011

FHA Loans and Your Credit Report

By Joe Wallace

Anyone applying for a new line of credit agrees to submit to a credit check, whether for a new car purchase, a credit card account or an FHA home loan. When it comes to FHA loans, the credit history is identified in FHA literature on home loans as “the most useful guide in determining a borrower’s attitude toward credit obligations and predicting a borrower’s future actions.” Simply put, an FHA loan applicant with a record of on-time payments looks like a good credit risk to the lender. But what about those who have had trouble in the past paying on time? When the lender examines your credit history, it’s not a simple case of saying no because the facts and figures show a history of late payments. According to the | more...

June 10, 2011

FHA Advice On Home Loans and Lenders

By Joe Wallace

FHA home loans are designed to be pro-consumer. While they don’t penalize a lender in any way, FHA loan rules do restrict the types and amount of fees, charges and other costs associated with borrowing. The mission of the FHA is to be fair to all parties, borrower and lender alike. The borrower doesn’t pay inflated fees, and the lender gets a loan guarantee from the government. The FHA offers referrals for housing counselors and advice to house hunters exploring their options under the FHA loan program. The FHA official site has plenty of sound advice for people trying to navigate the complexities of buying a home, getting the best price, and other aspects of becoming a home owner. A lot of it seems fairly obvious to experienced borrowers, but | more...

May 27, 2011

Can I Assume an FHA Loan?

By Joe Wallace

There was a recent question in the comments section of this blog about FHA loan assumptions, so we thought it would be a good time to review the basics. Assumption of an FHA loan is a process where, according to the FHA official site, “the responsibility of the mortgage is acquired by another person through either Simple or Creditworthiness process.” This means that a potential borrower could take over the FHA mortgage of another borrower, but in some cases the process varies depending on when the FHA insured loan was originated. The “Simple” assumption process is only for FHA loans originated before December 1, 1986. Loans after that date may also be assumed, but the FHA requires a “creditworthiness assumption process”. Simple assumptions allow the borrower and lender to agree | more...

May 4, 2011

FHA Cash-Out Refinancing Facts (Part Two)

By Joe Wallace

In our previous blog post, we discussed the rules for FHA cash-out refinancing loans. The FHA allows cash-out refinancing for qualified borrowers. Those qualifications include a requirement for the existing mortgage to be current. FHA

May 3, 2011

FHA Mortgage Insurance Premiums–When Do They Stop?

By Joe Wallace

FHA loan applicants have many things to budget and plan for. Mortgage insurance is one of the costs associated with a home loan, and FHA loan applicants are required to pay an annual mortgage insurance premium. The reason for mortgage insurance is to protect the lender against a loss associated with a default/foreclosure on the home. An FHA borrower making a down payment of less than 20% is required to carry mortgage insurance. But borrowers should know that mortgage insurance isn’t required for the entire term of the loan. The insurance is automatically terminated based on the nature of the loan, the length of the loan term and the Loan to Value ratio or LTV. According to the FHA official site, for all FHA mortgages closed after January 1, 2001, | more...

April 27, 2011

FHA Loans: How Does the FHA Help?

By Joe Wallace

“How can the FHA help me buy a home?” That’s one of the most frequently asked questions about the FHA home loan program. There is plenty of information about FHA home loans, but if you’re a first-time home buyer and don’t know where to look, having that question answered may be the most important part of the decision making process when trying to choose between a conventional loan and an FHA home loan. FHA loans are different than conventional mortgages in several basic ways. To start, FHA-insured loans are more attractive to lenders because the U.S. government backs the loan. That means lower risk for the lender. Because the government insures the loan in case of default or foreclosure, applicants with past credit trouble may have an easier time getting | more...

March 14, 2011

FHA Appraisals and Required Inspections

By Joe Wallace

In our last blog post we discussed FHA appraisals and when an automatic inspection is not required in cases such as wells or possible termite problems. A change in the rules in 2005 dropped the requirement for automatic inspections for termites except as required from the local or state authority. Well water issues were similarly changed except where governed by state or local law or the presence of qualifying factors such as nearby industry or agriculture. But in some cases automatic inspections are required no matter what. Any condition that could be a danger to the FHA loan applicant once they move in must be reported and an inspection of the property must be conducted if the buyer wants to move ahead with the sale. According to FHA requirements, “…the | more...

January 26, 2011

How FHA Loan Limits Work

By Bruce Reichstein

If you're a first-time home buyer looking to buy a home with an FHA loan, there are quite a few new terms and phrases to get familiar with. Anyone who has priced a home probably knows a lot more about the ups and downs of the housing market when it comes to the value of a particular home in a specific neighborhood...but newcomers to the FHA loan process may wonder if the homes they are viewing are worth the asking price and whether or not they can qualify for an FHA guaranteed loan to meet that asking price. There are several factors that go into the final amount of an FHA home loan. One of those factors is the appraised value of the property--how much the FHA deems the property | more...