Articles Tagged With: FHA Loan Questions

September 29, 2015

FHA Loan FICO Scores And Payment History

When the FHA loan rule book (HUD 4000.1) lists its minimum FICO score requirements, some people forget that these requirements are minimums and that participating lenders are free to require higher FICO scores, and often do. We get plenty of reader questions about FHA FICO score requirements–here’s a recent example: “I have my 3 FICO scores they are 633,601, and TransUnion is 565…I have credit but some late payments the last being December 2014…My question is do you think I could get a FICO loan for the mortgage or would I need to bring my FICO up?” The answer to the reader’s question is complex for two reasons–lender standards apply and while based on what’s listed here the reader technically qualifies for an FHA mortgage loan, the lender’s FICO score | more...

Can I buy a manufactured home with an FHA loan?

September 25, 2015

FHA Loan Applications and Repayment Issues

By Joe Wallace

We get many questions from readers about FHA loans in our comments section. Some of those questions refer to specific credit issues such as the one that came in recently asking: “My loan is currently processing. There is a problem with being 30 days late on my rent last year. Will this totally effect my changes of being approved???” The answer to this question isn’t as simple as quoting a passage from the new FHA loan rulebook, HUD 4000.1. The answer depends greatly on the borrower’s other financial qualifications. FHA loan rules state that a one-time lapse is not necessarily enough to dismiss the applicant as a bad credit risk. The lender will be looking for patterns that indicate whether the borrower has a reliable payment history on financial obligations. | more...

September 17, 2015

Mortgage Loan Interest Rate Trends: Holding Steady Ahead Of Big Fed Announcement

By Joe Wallace

Thursday is a very important day for mortgage rates, thanks to the much anticipated Fed announcement later today that could bring news of an interest rate hike…or not. That announcement, at the time of this writing, has not happened so we await the news from the Fed and will write a post about the announcement and its effect on the mortgage loan interest rate environment–look for that update on Friday morning. On Wednesday mortgage loan rates held steady, which was not the case on Tuesday as nervous investors made choices in the markets that directly affect mortgage loan rates that sent those rates higher. But for now, at the time of this writing, 30-year fixed rate conventional mortgage loan interest rates held steady (best execution) at or near 4.0%. FHA | more...

September 16, 2015

Mortgage Rate Trends: Moving Higher Ahead Of Fed

By Joe Wallace

You may notice us posting more this week about FHA loan interest rate trends; that’s because this is a major week for mortgage loan rates since the Fed announcement due Thursday on a possible interest rate hike is a major news item. Yesterday we reported that it is very likely that rates might go into a holding pattern ahead of the Fed, but as anxiety builds, investor behavior is putting upward pressure on the markets that directly affect mortgage rates. On Tuesday rates moved higher, pushing many lenders aggressively offering sub-four percent rates on 30-year fixed rate conventional mortgages (best execution) back into the 4.0% zone. Some borrowers may have noticed the difference in closing costs rather than an actual rate move depending on the lender. FHA mortgage loan rates | more...

September 9, 2015

Energy Efficient Mortgages And Updated FHA/HUD Rules

By Joe Wallace

In a recent blog post we discussed the pending release of HUD 4000.1, which is the new FHA single family home loan policy handbook. Among the changes and updates to take effect on September 14, 2015 when the handbook is launched, there are some guidelines about FHA Energy Efficient Mortgages (EEM) and the financing of non-EEM energy efficient upgrades/improvements. One area we didn’t cover in our last blog post about the EEM issue is the dollar amount limit for these upgrades. How much does the FHA allow the borrower to finance for such improvements? According to the FHA official site, which has a FAQ section on the most common questions about new rules and updates that will be part of HUD 4000.1, we learn the following about the dollar amount | more...

September 4, 2015

Selling The Home You Purchased With An FHA Mortgage

By Joe Wallace

We get many questions about appraisals, valuation and related issues. Many of the questions that come to us in the comments section come from home buyers, but a few come from those who want to sell the house they purchased with an FHA mortgage loan. One recent question in that area came from a reader who wanted to know what the best way to repair cracks in a basement wall might be, and whether or not the home should be put up for sale before the repair process was completed. The only way we can respond to questions like that is to say that it’s outside the scope of what we write about on this blog, but those looking for answers to questions in cases like these won’t be satisfied | more...

When Is An FHA Loan Better Than A Conventional Loan?

September 2, 2015

FHA Loan Questions: Late Payments Prior To Loan Application Time

By Joe Wallace

We get plenty of credit-related questions about FHA home loans and refinance loans in our comments section. One recent question that came in has to do with late payments on financial obligations prior to filling out an FHA mortgage application. The reader mentioned having late payments in the last year in addition to having a credit score in the mid-500s. “Can this affect my chances for FHA loan approval?” is the most common of questions, and naturally the answer is dependent on circumstances. In general, FHA loan applications are best turned in when the borrower has a solid 12 months of on-time payments for all financial obligations. Borrowers with otherwise outstanding credit and/or “compensating factors” may find a lender more forgiving if there is an issue with credit history, but | more...

September 2, 2015

Some Frequently Asked Questions About The New FHA Loan Rules In HUD 4000.1

By Joe Wallace

On September 14, 2015, a new FHA single-family home loan policy handbook takes effect. It’s known as HUD 4000.1 and has several updates, changes and revisions that will take effect on the 14th. There have been some frequently asked questions about some of the details found in the new handbook–the FHA and HUD have published some answers to those questions in anticipation of the launch date for the new rule book. Here are some of those examples as printed on the FHA/HUD official site–one of the top questions? Whether referral fees will be permitted for the origination of FHA single family mortgage loans. The answer: “The lender, or any of the lenders employees, must not pay or receive, or permit any other party involved in an FHA-insured mortgage transaction to | more...

August 31, 2015

FHA Loan Questions: Title Problems

By Joe Wallace

What follows should not be construed as legal advice. As a general rule, it’s a smart philosophy to seek legal advice for a lawyer and be wary of legal guidance from a non-lawyer. The best legal advice any non-lawyer can dispense is, “talk to a lawyer”. A reader got in touch recently with a question about FHA refinance loans. He asked about a situation where the bank’s title search uncovered a lien against the property from a third party. “…Title search showed that the property was also deeded to another person that had a lien on the property.” “We went to two trusted lawyers that advised us to file Bankruptcy because the other property owner was in trouble with the law and that the Title insurance we paid for was | more...

August 24, 2015

FHA Loans And Non-Purchasing Spouses

By Joe Wallace

There are a lot of questions asked about FHA loans and how spouses can buy together. Can the FICO scores of one spouse make up for the lower scores of the other borrower? Can one spouse’s income offset the lower income of the other? How does state law factor into FHA loan applications when spouses apply? All valid questions. But what about circumstances where one spouse is not borrowing? Does an FHA loan require action on the part of a non-borrowing spouse? The answer can be influenced by state law, lender standards, and FHA loan regulations. At the time of this writing, FHA loan rules that govern non-purchasing spouses can be found in HUD 4155.1 Chapter Four, Section A. There we learn the following: “If required by state law in | more...