Articles Tagged With: FHA Loan News

November 13, 2014

FHA Loan Credit Issues: A Reader Question

A reader asks, “I am in the process of trying to rebuild my credit, but am finding it difficult to acquire in my own name. I have a bankruptcy discharged in Feb 2013. I make all utility, insurance and rent payments on time or within the allotted grace period. Altho I am financially responsible, I feel it may not reflect in my credit report with few or no recent accounts reporting…” “What length of time will impact my credit report/score with credit card usage?? …My mother recently obtained a small auto loan (on my behalf) thru a credit union to get the most affordable rate & payment option. She has me listed as co-signer, will this also report on my credit & impact my payment history & score as if | more...

November 12, 2014

FHA Mortgage Rate Trends: Up and Down

By Joe Wallace

Since our last report on FHA mortgage rate trends, we’ve seen some ups and down with mortgage loan rates in general, but the overall trend seems to be upward. Last Friday was a highly anticipated jobs report, and ahead of that last Thursday we saw rates hold steady. After the report came out on Friday mortgage loan rates did gain back some of the ground lost earlier in the week, but come Monday those gains began slipping away again. Tuesday was Veterans Day so markets were closed and there was no rate movement to report–but on Wednesday it was a bit of false hope to start the day with rates beginning stronger but ultimately weakening by day’s end. What does all this mean? At the time of this writing, 30-year | more...

November 7, 2014

FHA Loan FICO Score Requirements: A Reader Question

By Joe Wallace

A reader asks, “I have a question on the down payment assistance and credit scores. We have credit scores that average to 640 and 620. Our lender has asked us to either raise our scores or have a 2 month reserve in addition to our 3.5% down payment as a requirement for FHA/HUD is this standard?” FHA loan rules do specify a minimum FICO score for borrowers who want to qualify for the lowest down payment of 3.5%. That FICO score is 580. However, lender standards can and often are higher than that number. FHA loan rules do not prevent the lender from have more strict standards as long as they are applied in compliance with federal law, Fair Housing Act regulations, etc. Individual borrower circumstances can and often do | more...

November 4, 2014

FHA FICO Score Minimums: A Reader Question

By Joe Wallace

A reader asks, “If I only need a fico score of 580 to qualify for a FHA loan, why would my (lender name deleted) agent tell me that I need 600 score before he could preapprove me for a mortgage loan?” This reader question reveals a common misconception about the FHA single-family home loan program. It is true that the FHA does list a minimum FICO score for borrowers–borrowers who have FICO scores below 580 won’t qualify for the lowest downpayment amount of 3.5% and borrowers with scores below 500 don’t qualify at all. However, these score requirements are the FHA minimums, not the lender’s standards. Lender FICO scores can and do vary from the FHA loan rules–they can be more strict than the FHA loan rulebook’s own FICO requirements. | more...

October 28, 2014

FHA Appraisals and Leaking Roof Issues: A Reader Question

By Joe Wallace

A reader asks, “My daughter bought home with FHA approved loan FHA appraisal did not said roof is in bad condition. After 4 months roof is leaking in 4 spots. She called roofing company to see what’s going on and they said roof should be replaced but with FHA regulations roof should last at least 2 years. What should she do now?” The FHA and HUD address this specific issue in a document for FHA loan applicants titled, “For Your Protection, Get A Home Inspection“. It says in part: “An appraisal is different from a home inspection. Appraisals are for lenders; home inspections are for buyers. An appraisal is required to: — Estimate the market value of a house; — Make sure that the house meets FHA minimum property standards/requirements; and — Make sure | more...

October 24, 2014

FHA Loan Refinancing: A Reader Question

By Joe Wallace

A reader asks, “We currently have a FHA loan on our house and our mortgage company says we can not do a refi with a adjustable rate even know we will not be in our house 5 yrs or more. and now we have a 4.75 fixed rate for 30 yrs so what is our best option to get a lower rate cause we will be taking our retirement and social security in the next 2 months and will be in a hardship crisis.” This is a difficult reader question to answer. There are many reasons why a borrower could be turned down for a refinance loan, and some of those reasons can depend on the type of refinancing being applied for–cash out refinancing, for example, may be difficult for | more...

October 23, 2014

This Week’s FHA Mortgage Rate Trends

By Joe Wallace

This time last week, we reported mortgage rates headed for lower territory thanks to a variety of factors including market volatility. This week, the difference was definitely noticeable, with rates holding steady or edging slightly higher, but still maintaining at-or-below 4% rates for 30-year fixed rate conventional loans (best execution). FHA rates held steady at 3.5% best execution. While FHA mortgage rates have managed to stay at 3.5% this week, how long that could number may persist? Next week is poised to be an important one for rates in the short term. Why? There are a number of reasons why conditions might lead interest rates upward, but one of the most anticipated things scheduled for next week is the Fed announcement–a regular occurrence that can and often does push rates depending on | more...

October 22, 2014

FHA Loans, Foreclosure, and New FHA Loan Applications: A Reader Question

By Joe Wallace

A reader asks, “I was a cosigner on a FHA loan in 2007 and my ex-boyfriend let the home go into a foreclosure process, the home was paid in full before it was foreclosed. it has been a year that the home has been paid off. Will I still be able to qualify for a FHA loan now? My credit score is good and I have all bills paid up to date including credit cards.” This is a situation that may or may not have applicable FHA loan requirements depending on the circumstances of the foreclosure. Since the reader indicates that the foreclosure didn’t actually happen, there may be a gray area that’s not fully addressed by FHA loan rules. However, lender standards may play a big part in whether | more...

October 16, 2014

FHA Mortgage Loan Interest Rate Trends For October 13-17 2014

By Joe Wallace

If you are interested in an FHA home loan this week or have been keeping an eye on FHA mortgage loan rates, you know this has been a particularly good time for mortgage rates. For a large part of the year we have seen the best execution rates for FHA home loans persisting at around 3.75%, down from an earlier long-held best execution rate average at or just above 4%, depending on the lender. Volatile market conditions this week contributed to downward movement for interest rates–FHA mortgage rates have fallen from their long-held 3.75% comfort zone and fell into a range of rates between 3.375% and 3.5% best execution. Some borrowers may get confused over the reports of “best execution” rates–what does this term mean? “Best execution” mortgage loan rates are those | more...

What you should know about FHA 203(h) Loans For Disaster Victims

October 14, 2014

FHA Loans and “Reasonable Commuting Distance”: A Reader Question

By Joe Wallace

A reader asks, “What is the maximum commuting distance allowed for a FHA financed primary residence?” This question doesn’t have a set answer, since the FHA does not spell out an exact mileage amount or specific driving time that would meet or exceed the notion of “reasonable commuting distance”. Let’s examine what the FHA loan rulebook, HUD 4155.1 Chapter Four Section B has to say about reasonable commuting distances. The information below is presented in the context of advising the lender on what is appropriate if an FHA borrower wishes to apply for a second FHA loan for the purpose of getting another home. This is generally not allowed, but exceptions can are are granted for increases of family size or a job relocation. From HUD 4155.1 Chapter Four: “A | more...