Articles Tagged With: FHA Loan Rules

July 12, 2022

FHA Loan Rules For Self-Employed Borrowers

What do self-employed house hunters need to know about the home loan approval rules applicable to self-employment income? If you are not sure how your FHA lender will qualify you based on your income, keep reading–there are some important facts you will need to know before you fill out FHA loan paperwork. The first thing to know is how the FHA defines “self-employment” and why. The lender is required to ensure your income is stable and reliable and that you will continue to earn that income to help pay for your mortgage. The FHA has different qualification rules for self-employment income; you are basically required to show two years of self-employed income in a similar line of work to your salary, commission, or hourly income when you were not self-employed. | more...

July 11, 2022

FHA Adds New Income Flexibility Guidelines For FHA Borrowers Affected By COVID-19

By Joe Wallace

During the global COVID-19 pandemic, many house hunters experienced a loss of income because of coronavirus-related employment gaps, job losses, and similar financial hardship. When you are applying for a mortgage loan, late and missed payments can have a negative effect on your ability to find an affordable home loan. There were many forms of relief for COVID-19-related economic hardship, but as the fallout from COVID continues, it’s clear that some additional measures are needed. That’s one likely reason the FHA has announced updated COVID-19 credit qualifying guidelines for borrowers trying to buy a home with an FHA mortgage. In early July 2022 the FHA announced new guidelines for participating FHA lenders. These new guidelines permit more flexibility for the lender when qualifying a borrower who may have income or | more...

June 30, 2022

FHA Home Equity Loans?

By Joe Wallace

Is there such a thing as an FHA home equity loan? Some borrowers want to tap into the equity built up in their home to pay bills or to make a large purchase, others may want to start home improvement projects. Conventional mortgages often come with the option of applying for a home equity loan or a home equity line of credit. What options exist for FHA borrowers? FHA home loan options don’t include a home equity line of credit or a home equity loan. You won’t find an FHA loan option that mimics these options. What FHA borrowers do have the option to apply for? FHA Cash-Out Refinancing, which allows you to take cash back at closing time if you meet the following requirements in addition to credit qualifications: | more...

June 29, 2022

Finding The Best FHA Lender

By Joe Wallace

Which bank has the best FHA loan options? Experienced borrowers know the answer to this question already; the best FHA lender is the one willing to work with your FICO scores, the type of home loan you need, and offers you the right rates. But if you are asking the question, “Which bank has the best home loan?” you want answers that are more specific. How do you find a lender who can help? If you are searching online, you might try looking for the specific type of home loan you seek. Are you looking for an FHA One-Time Close construction loan? Searching with that specific phrase will help. But it can also pay to search more specifically than that; try looking for “FHA Construction Loans in Texas” in Google. | more...

June 27, 2022

FHA Home Loans And Seller Inspections: What You Need To Know

By Joe Wallace

What is a seller inspection and why should you know what it is before you start looking for a home to buy with an FHA mortgage? The National Association of Certified Home Inspectors official site says that a seller inspection, sometimes referred to as a pre-listing inspection, is popular in some areas, “…because they virtually eliminate all the pitfalls and hassles associated with waiting to do the home inspection until a buyer is found.” A seller inspection can tell you (as a buyer) a lot about a home before you decide to make an offer. But why would a seller have an inspection if there’s a risk that a defect or problem might be uncovered that can hurt the seller’s chances to sell the property? Generally speaking, it’s common sense | more...

One Time Close Mortgage Loans: The Base Home Sales Price

June 23, 2022

Why Choose An FHA Construction Loan?

By Bruce Reichstein

If you want to build a home on your own lot or on land you buy in conjunction with the project, you have two basic options to choose from. There is a type of construction loan that features two applications and two closing dates. One is a loan to pay for the labor and materials in the construction of the property itself. Once the construction phase is over, the borrower applies for a second loan that pays off the construction loan and serves as the mortgage. It is important to remember that the loan for building your house is not a 30-year mortgage. If you want to build a custom home this way, the first loan is sometimes called an interim loan with the second being referred to in the | more...

June 21, 2022

Seller’s Markets, Buyer’s Markets, And FHA Loans

By Joe Wallace

What does it mean to get an FHA loan when you are in a buyer’s market? What does it mean to use an FHA mortgage in a seller’s market? If you are new to house hunting chances are you’ve heard these terms before, but what do they mean in the context of a house hunt? FHA Home Loans In Buyer’s Markets What does it mean to be shopping for a house in a buyer’s market? The simplest answer is that you have an advantage as a buyer because there may be plenty of homes to choose from with little serious competition from other buyers. That lack of competition may be because of the supply of available houses for sale. In a buyer’s market, you would still want to get pre-qualified | more...

June 14, 2022

Things To Look For When Buying A House With An FHA Mortgage

By Bruce Reichstein

Finding the right home to buy with an FHA home loan can be challenging. If you are a first-time home buyer, do you feel intimidated about making a decision on the size and configuration of the house you want to buy? You are not alone. Fortunately, you can help yourself in this process by making a checklist of features and priorities you can refer to when reviewing each property. This can be a better approach than trying to do it all from memory; you won’t forget to ask the seller or real estate agent about something important if you have it written down in front of you when you take the tour. What To Look For When Buying A Home With An FHA Mortgage: Overall Size That sounds fairly obvious | more...

June 10, 2022

FHA Loans: Calculating The Monthly Mortgage Payment

By Bruce Reichstein

One of the most important questions a home loan applicant can ask is, “How much will my monthly mortgage payment be?” While this may seem to be a simple calculation of how much the loan is, divided by how many months the mortgage loan payments are required, the truth is that it’s more complex than that. Mortgage loan applicants have a variety of online mortgage calculators to help them arrive at estimates, but what actually goes into the calculation of your monthly mortgage payment? If it’s not a simple matter of taking the loan amount and dividing it by the number of months the loan term is set for, what DOES go into those calculations? There are a variety of things. The basic calculation we mention is part of it, | more...

One-Time Close Construction Loan Options For Veterans

June 9, 2022

Questions To Ask About FHA Construction Loans And 203(k) Rehabilitation Loans

By Joe Wallace

There are FHA mortgages that let you build a home from the ground up on land you already own or purchase in conjunction with the mortgage. These are called FHA One-Time-Close mortgages. There are also FHA loans that can help you buy and renovate a home. These are called FHA 203(k) Rehabilitation loans and they are also available as an FHA refinance option. Both types of loans will require you to use escrow, hire builders, and have custom work done. And if you have never done this before, there are a few things to know going into the process. Did you know that not all builders are suitable for construction loans? Not every licensed contractor has experience with a large project such as a home renovation, and you will want | more...