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Articles Tagged With: FHA Loan Rules

apply for an FHA loan

June 29, 2016

FHA Loan Questions: Legal Ownership Of A Property To Be Refinanced

By Joe Wallace

A reader asks, “I have a FHA loan that I received with my ex wife we have been divorced for approx. 7 years. Due to the amicable nature of the divorce we did not specify that I would keep possession of the house, we have a gift of deed.” “But the mortgage company says I can not refinance because there is no clause in the divorce decree about house ownership transfer. Wouldn’t the deed of gift be a legal binding document to prove ownership?” FHA loan rules found on page 126 states, “A refinance transaction is a new Mortgage for a Borrower with legal title on the same Property with the proceeds used to pay off any existing liens”. We don’t give out legal advice or opinions here as it’s | more...

 
FHA Loan Credit Score

June 29, 2016

FHA Loan Questions: Overtime Pay

By Joe Wallace

We get many questions in our comments section about how FHA loan rules may apply to a specific situation with regard to employment, pay, and verifiable income. Some potential borrowers want to know if having frequent changes of employment will negatively affect an FHA loan application (not necessarily) and others want to know if their new commission income will count towards their “effective income” (it depends on how long the commission income has been earned and whether it’s likely to continue). Still others want to know how the question of overtime pay is handled in the FHA loan rulebook. Recently, one reader asked: “I previously worked in law enforcement (resigned in September of 2015) and I obtained a job in another industry which pays me double my previous salary. I | more...

 
apply for an FHA loan

June 24, 2016

FHA Loan Questions: Co-Borrowers

By Joe Wallace

A reader asks, “My husband is a co burrower on his mothers mortgage loan and he has been asking her to remove his name from it but she hasnt. The mortgage has affected his credit and has made it hard to get a home of our own. Can his name be removed from the mortgage or is this something we need a lawyer for?” Before answering this question, let’s examine how the FHA defines the role of a co-borrower. Page 128 of HUD 4000.1 states: “To be eligible, all occupying and non-occupying Borrowers and co-Borrowers must take title to the Property in their own name or a Living Trust at settlement, be obligated on the Note or credit instrument, and sign all security instruments. In community property states, the Borrowers | more...

 

June 23, 2016

FHA Loan Questions: Self Employment

By Joe Wallace

A reader asks, “I am working on getting an FHA loan and my lender asks that I provide W2s. I am self employed via my own business as well as had a regular job how will this affect my loan being that i have no W2 and that my taxes were done via 1099 and 1040 forms for myself and my business?” In cases like these, the lender will require whatever tax documentation that is available to show proof of income. For self employed borrowers, the lender may also require additional documentation such as profit and loss statements, business plans, and other items that may be required. Lender standards will apply so FHA loan rules and minimums are only part of the equation. FHA loan rules in HUD 4000.1 do | more...

 
What Is An FHA Loan Limit?

June 22, 2016

FHA Loan Questions: Restrictions On Resale

By Joe Wallace

One type of frequently asked question that sometimes pops up involves whether or not FHA mortgage loans have any restrictions on the resale of a home. While FHA loan rules require a borrower to be free to sell the property whenever they wish, there are certain time restrictions on the resale of a home when it comes to purchasing a “flipped” house with an FHA mortgage. Specifically, HUD 4000.1 has a section dedicated to this practice, and addresses it accordingly. According to Page 140 of HUD 4000.1, “flipping” is defined as follows: “Property Flipping is indicative of a practice whereby recently acquired Property is resold for a considerable profit with an artificially inflated value, often abetted by a Mortgagees collusion with an Appraiser.” This practice is restricted when it comes | more...

 

June 21, 2016

More On FHA Adjustable Rate Mortgages

By Joe Wallace

In a previous blog post we discussed FHA adjustable rate mortgage loans and looked at some aspects of how these loans work. FHA adjustable rate mortgages, also known as ARM loans or FHA ARM loans, feature an introductory rate that the borrower and lender will negotiate. This rate will expire at some point and the new rate will be calculated. The interest rate adjustments over the lifetime of the loan are regulated by an FHA requirement that includes a cap on the amount and severity of the rate changes. As we discussed in the last blog post, there are four components to an ARM loan you should know, which include the following: 1. index 2. margin 3. interest rate cap structure 4. initial interest rate period (also known as a | more...

 

June 16, 2016

FHA Loan Questions: Legal Issues

By Joe Wallace

A reader asked us a question in the comments section recently about legal issues. “My husband and I assumed my father in laws mortgage back in 2013 with him as a non occupant co-borrower. We have never seen the title and hes withholding it from us. Is this legal for him to do? Also, if our name appears on the tax bill, Does that mean we are listed on the title as well?” There are many things that can affect the answer to questions like these. State law is a big one. Laws vary from state to state as to the nature of certain aspects of home loans, ownership, etc. Another factor is the type of home loan the borrower has. Is this reader’s question about an FHA mortgage, conventional | more...

 

June 13, 2016

For Consumers In Need Of Help Preparing For An FHA Mortgage

By Joe Wallace

Many borrowers feel intimidated by the home buying process. Are you unsure about credit score issues, pre-purchase budget issues, down payment requirements, or appraisal rules? It’s easy to understand why; buying a home is a major investment and it’s definitely a step worth taking the time to research and save up for properly. Why does it take a year or better to get prepared for the home loan application? What are the basic credit score requirements for an FHA mortgage? Can I refinance my home at some point with a cash-out loan? These are all important questions. There are other commonly asked questions, too. Many involve dollar amounts for down payments, appraisal fees, or other loan expenses. We get asked these questions frequently in the comments section, but unfortunately there’s | more...

 

June 13, 2016

HUD Announces First Healthy Homes Month

By Joe Wallace

The Department of Housing and Urban Development has announced that June is the first-ever Healthy Homes Month, and is working to raise awareness of hazards in the home including lead-based paint, asbestos, and ways to make the home a healthier environment. According to a press release at the HUD official site (HUD.gov), “Most Americans spend up to 90 percent of their time indoors, exposing them to home health and safety hazards ranging from asthma triggers to potentially deadly pollutants like asbestos and lead-based paint. To reinforce the connection between a family’s health and their homes, the U.S. Department of Housing and Urban Development is declaring this June as the first-ever National Healthy Homes Month.” The program was initiated by the HUD Office of Lead Hazard Control and Healthy Homes (OLHCHH), | more...

 

June 9, 2016

More FHA Mortgage Loan Questions and Answers

By Joe Wallace

Do you have questions about FHA home loans? We get many requests for information in the comments section of this blog, and a good number of those questions are frequently asked, indicating the need to have more discussions on such topics. Buying a home may seem intimidating at first, but there is a process involved that follows certain basic steps towards completion. Let’s examine some of them: How do I start planning for an FHA home loan? The key to getting ready for an FHA loan application is to give yourself time. It’s recommended that potential home loan applicants start getting ready at least 12 months before actually filling out an application, and there are several good reasons for that. One is that it takes time to check and verify | more...