Articles Tagged With: FHA Loan

July 11, 2024

FHA 203(k) Rehab Loan Program Updates

Changes are coming for those interested in remodeling a home with an FHA rehab loan. The Department of Housing and Urban Development, along with the Federal Housing Administration, have updated policies associated with the FHA 203(k) Rehabilitation Mortgage Insurance Program. These changes were implemented to modernize the program and make it a more helpful tool for individuals and families seeking affordable financing options for home renovation or rehabilitation projects. The FHA 203(k) program offers two loan variations: a “standard” 203(k) for major remodeling projects that may or may not include work on load-bearing walls. A “limited” 203(k) is available for smaller projects and for what the FHA determines to be “non-structural repairs.” Several fundamental changes have been made to aspects of the FHA 203(k) program. First, the total rehabilitation costs | more...

July 1, 2024

Comparing Home Loan Offers

By Joe Wallace

Are you planning to buy a new home? You can find the right home loan by applying a similar process you use to find the right house. In fact, shopping around for the right mortgage loan is just as important as shopping around for the right house. If you are considering an FHA mortgage to buy, renovate, or build a home, you’ll want to make the same kind of informed decisions about the lender and the loan. Comparing lenders and loans is the way to do that. But there are some tips you can follow to make that process more streamlined. Research Multiple FHA Lenders While on paper, FHA loan terms and conditions such as FICO score requirements seem to be standardized, the FHA minimum FICO score requirements are just | more...

June 24, 2024

Home Loan Interest Rate Trends For Summer 2024

By Joe Wallace

Should house hunters dive into today’s housing market? Or is it safer to wait until rates have fallen a bit further? Yahoo! Finance published a mortgage rate report in June of 2024, and that report includes a prediction that home loan interest rates could (as stated by Fannie Mae) remain in the 6% range for the rest of 2024. That affects conventional mortgages, FHA loans, and even need-based mortgages like those offered by the USDA. According to the article, Fannie Mae “predicts 30-year fixed rates will be 6.7% at the end of 2024.” That’s better than the May forecast when Fannie Mae predicted home loan rates could hit 7% by year’s end. The Yahoo! Finance article points out that home loan interest rates are coming down, but slowly over time. | more...

June 12, 2024

FHA Appraisals: What To Remember

By Bruce Reichstein

The FHA appraisal is one of the most important pre-closing day aspects of your home loan process. Without an appraisal, your lender can’t know if the home meets minimum basic standards for safety, remaining economic life, and serviceability. The lender also can’t make a realistic judgment about the fair market value of the home without an appraisal. What should you know about this process and how it affects you? FHA appraisals are a tool for the lender and not a tool for the borrower. You may be privy to the results of the appraisal, but that does not mean it was designed to help you as a borrower. It is not meant to tell the borrower anything actionable, especially where the condition of the home is concerned. That is the | more...

May 17, 2024

Conventional Loans Versus FHA Mortgages

By Joe Wallace

What’s the major difference between FHA mortgage loans and conventional loans? Actually, there are several, but the first and most basic difference is that an FHA mortgage is guaranteed by the government. A conventional loan is not. The government’s backing of an FHA mortgage makes the loan less of a risk to the financial institution offering you a line of credit to purchase your home. And because the loan is backed by the government, FHA mortgages feature lower down payment requirements than many conventional mortgages. You may find conventional loans requiring 10 or even 20 percent down, whereas an FHA mortgage for qualified borrowers with FICO scores of 580 or above may qualify for maximum financing. That means a down payment requirement of only 3.5% of the adjusted value of | more...

April 30, 2024

FHA Home Loan Facts To Know Before You Buy

By Joe Wallace

Many articles discuss what you can and cannot do with an FHA mortgage, such as the types of homes you can buy or whether or not you can earn money from a house you purchase with an FHA loan. But there are other issues you should know in the don’t department. For example, did you know you can finance certain closing costs, including the FHA upfront mortgage insurance premium? However, rules govern that portion of the transaction. The big takeaway from those rules is that you can’t finance a portion of that up-front mortgage insurance premium. FHA loan rules (not the lender’s requirements) state that a borrower pays the loan in full or finances it in full at closing time. There are other similar issues to know when you are | more...

April 24, 2024

Should You Buy A Home Now?

By Joe Wallace

U.S. News and World Report published an article in Spring 2024 with data from a U.S. News survey of American mortgage trends this year. The information from that report indicates that many potential real estate buyers may be delaying their commitments to see what happens with mortgage loan interest rates. In that survey, 67% of house hunters who responded say they are on a wait-and-see basis with respect to home loan interest rates. These house hunters hope to wait out the rates before buying a house this year. Also according to the survey, approximately one quarter of the respondents “want to see them below 5% before buying, which isn’t expected to happen in 2024 or even 2025. About half (49%) are willing to wait for more than six months for | more...

April 17, 2024

Questions To Answer Before You Start Househunting

By Joe Wallace

Making assumptions about the home loan process can hurt you. For example, some borrowers believe the FHA loan program is wrong for them because they aren’t financially disadvantaged. That assumption is not true. Others wrongly believe it is impossible to qualify for an FHA loan because they have less-than-perfect credit. This is sometimes true depending on the circumstances but if your FICO scores are above 500, this type of mortgage is worth considering. Additional lender standards may apply but the FHA loan program offers more forgiving credit requirements than some conventional equivalents. Any Residence Can Be Purchased With An FHA Mortgage? FHA single-family home loans are not permitted for investment properties. That said, it’s possible to use an FHA mortgage to buy a one-to-four-unit property but the borrower must live | more...

January 31, 2024

How FHA Mortgages Compare To Conventional Loans

By Joe Wallace

How do FHA mortgages stack up to their conventional loan counterparts? Typical down payment issues are the most obvious comparison. The FHA has a 3.5% requirement, and conventional loan requirements vary. There are some important differences to know before you choose which mortgage loan is best for your needs. FHA Loan Best Practices FHA mortgages have two sets of rules. FHA loan program guidelines but also, lender standards like all mortgages. The FHA requires its participating lenders to keep policies that benefit the borrower. One example is the loan rule requiring ZERO penalties for early payoff of the loan. Another perk? The option to refinance later with an FHA no-credit-check streamline refinance loan option. Not all borrowers may want this option (no cash out is allowed) depending on what kind | more...

January 30, 2024

Five Reasons To Buy Your First Real Estate With An FHA Home Loan

By Bruce Reichstein

FHA home loans are a great way to make your first real estate purchase. Are you looking at homes for sale and trying to decide the best mortgage loan for you? If you are a first-time home buyer and feel confused by what your real estate agent finds in MLS listing data while searching for “houses near me”, remember that the FHA mortgage loan option is available to anyone who financially qualifies. If you are talking to a real estate agent, do not forget that FHA loans are not restricted to first-time homebuyers or those who have never owned property. You can own other property and still buy a home as your primary residence using an FHA loan whether you’ve purchased another property or not. #5: FHA Loans Are Guaranteed | more...