Articles Tagged With: FHA Loan Rules

November 6, 2023

Mortgage Interest Rate Trends In Late 2023

In the last quarter of 2023, the Fed paused its interest rate hike campaign. First-time home buyers sometimes ask whether that means a pause on changes to FHA home loan interest rates. The short answer is no, and we’ll explain why below. Fed Rate Hikes Versus Home Loan Interest Rates The first thing to know? The Fed does not directly control mortgage rates but its actions do affect them less directly. Fed actions to increase rates are aimed at the lender side of the operation; when it pauses rate hikes, the Fed is putting increases on hold that affect how much it costs a lender to loan you money. The lender’s increased costs are passed on to the consumer through higher mortgage rates. What It Means When The Fed Pauses | more...

October 30, 2023

Using Downpayment Assistance With Your FHA Loan

By Joe Wallace

If you want to offset higher interest rates when buying a home, it may be worth your time to investigate your options for a local downpayment assistance program. These are offered in your state, not by the FHA or HUD. Buying a home using downpayment assistance can help you save more upfront on the mortgage but can also be an advantage because you can use the money saved for the downpayment in other areas for your new home instead. Using a DPA may also help you to hang on to more of the money you saved for the downpayment to use toward mortgage payments. It’s a smart idea to pay more than the minimum due each month. It helps you save money over the term of the mortgage. But what | more...

October 26, 2023

FHA Loan Interest Rate Trends Late 2023

By Joe Wallace

In the final months of 2022, housing market watchers thought a housing market recovery would begin sometime after the 2nd quarter of the new year. Sadly, those predictions did not come true. And now, a similar analysis is happening now in ahead of the house hunting season in the spring of 2024. What’s ahead in the new year for mortgages, interest rates, and the housing market? State Of The Mortgage Industry Late 2023 U.S. News and World Report notes that mortgage rates have stayed higher, for longer. And they aren’t the only ones discussing those higher rates affecting the 2024 housing market, too. According to Investopedia, the national average interest rate exceeds 8%. And while that number is subject to change in smaller increments day to day or even month | more...

October 23, 2023

FHA Loans: Buy Local?

By Joe Wallace

Some believe it’s better to buy local, even when shopping around for services like a lender for an FHA mortgage. This also applies in some cases to those who feel a real estate agent is necessary. Do you always have to use a realtor or local lender? In some cases, the need for a local bank or a real estate agent is clear. But what about the house hunters who aren’t sure whether they need to use a realtor or the neighborhood bank? When looking for an FHA mortgage, there are several choices to consider. And these issues go above and beyond some of the basics, such as the size and configuration of your new home. Borrowers house hunting in the same area where they currently live may not feel | more...

October 19, 2023

HUD Announces Accessory Dwelling Unit Policy

By Joe Wallace

The Federal Housing Administration defines an ADU is “a single habitable living unit with a means of separate ingress and egress that meets the minimum requirements for a living unit.” And now, FHA borrowers can get consideration for ADUs and possible rental income associated with them. Accessory Dwelling Units Some homes come with ADUs, others are purchased without them and they are added later by the new owner. Why are ADUs such a potential factor in home loan approval? Because now, FHA loan rules allow borrowers to apply for a mortgage to buy an owner-occupied single-family home with or without ADUS. But when they are present or scheduled to be added, FHA loan rules now permit the lender to consider possible rental income from these units as qualifying income for | more...

October 17, 2023

FHA Loan Down Payment Concerns

By Joe Wallace

Looking for a home to buy with an FHA mortgage? Planning and saving for the down payment or planning to have one provided for you (using approved sources ) is a big part of the early stages of your home loan process. You aren’t alone in this journey. You may qualify for help from a local down payment assistance program that meets FHA standards. You can also get down payment gift funds from friends and family. Accept a down payment gift before your closing date, and you have some steps to take before you pay the money. FHA loan rules, like many other home loan programs, have rules that govern the down payment. FHA Down Payments Are Regulated Your down payment is regulated by federal law to prevent a lender | more...

October 16, 2023

What To Know About Changing Mortgage Loan Interest Rates

By Joe Wallace

In October 2023, fixed-rate mortgage rates spiked to what CNBC called “the highest level” since the year 2000. But adjustable rate mortgages did not follow suit. Instead, ARM loan rates fell. You might be wondering why. CNBC reported the higher fixed rate mortgages caused more people to explore ARM loan options. Increased demand seems to have made ARM applications go up. and demand fell from an average of 6.49% down to an estimated 6.33%. Adjustable Rate Mortgages, Fixed Rate Mortgages Adjustable rate mortgages offer lower introductory rates. Once the intro rate expires these loans feature rate adjustment periods. The lower rate makes it potentially cheaper to buy a home. At least until the rate adjustments begin. Future-minded borrowers should consider applying for ARM loans with an exit strategy to deal | more...

October 12, 2023

Optional And Mandatory FHA Home Loan Fees

By Joe Wallace

If you are new to house hunting or new to the FHA loan process and feel intimidated shopping around for a lender, realtor, or contractor, you may wonder whether certain third-party home loan services are worth the effort and expense. Borrowers need certain services like inspections and home appraisals, but for others, you may want to think a bit before committing. Realtors and Real Estate Agents Some mistakenly believe you MUST use an agent to buy a home. But what’s the reality? Hiring a realtor is 100% optional. That said, do you feel more comfortable with one instead of without? Using a realtor is not a waste of money if you are unfamiliar with the neighborhood, the city, or the state. It’s also a good move if you aren’t quite | more...

September 26, 2023

Who Gets Involved In Your FHA Home Loan?

By Joe Wallace

Buying a home with an FHA loan involves more than just three people; the buyer, the seller, and the participating lender’s loan officer. Third parties are typically involved in your transaction as you make your way to closing day and home ownership. Who are these third parties and why do you need to know them? They can include title companies, home inspectors, pest control, and real estate agents. Knowing the service providers are in your area is key since you will need to compare services and prices before you commit. Title Search For The House You Want To Buy A title search is a crucial step in the home buying process. Don’t buy a home without a title search as you need that process to tell you if there are unresolved | more...

September 25, 2023

Buying A House With More Than One Living Unit

By Joe Wallace

FHA mortgages are not limited to single-unit homes. Did you know that it’s possible to buy a home with an FHA loan that has as many as four living units? First-time home buyers looking for smaller homes might not have considered using an FHA mortgage to buy a house with multiple living units. And doing so is not for everyone. But for those who do need that larger home, it’s an option worth looking into for more than one reason. Multi-Unit Home Purchases Using An FHA Mortgage? FHA loan rules in HUD 4000.1 permit the purchase of house with up to four living units without changing the basic loan approval structure. You won’t be asked to make a down payment larger percentagewise than for a single-unit home. That said, a | more...