Articles Tagged With: FHA Loan

March 27, 2017

FHA Loan Rules For Part-Time Income

A reader asked us a question in the comments section this week about part-time income and how it may or may not qualify as verifiable income for an FHA loan. The reader asks: “My file is with the underwriter for review, they have asked for an VOE from my employer but they stated I work 16 hours a week (position hired into) but I always work more the 16 hr a week for the last 5-6 months and I’m going to continue to work more then that, they have already seen check stubs and both w2 from 2015 and 2016. Could this deny me for my loan?” We first have to determine what the FHA definition of part-time income. HUD 4000.1 gives lenders guidance in this area beginning with the | more...

March 23, 2017

FHA Loans After A Deed-In-Lieu

By Joe Wallace

How long does a borrower have to wait to apply for a new FHA mortgage following a deed-in-lieu? A reader asks us a question along those lines this week: “We went Chapter 13 about 8 years ago and paid the CH 13 off through the repayment plan. We also relinquished our home with a DIL of foreclosure. The house sat on the market for 7 years and finally sold last July. Three different banks have told us that we are not eligible yet to buy another home because we have to wait 2-3 years (depending on who we asked) after the home was transferred out of our name to the new owner. Please help!! How many years do we have to wait? Is it 2 or 3? Thank you!” FHA | more...

March 22, 2017

Mortgage Rate Trends: Still Moving Lower

By Joe Wallace

Mortgage rate trends continue to point to lower numbers post-Fed. Since our last report we’ve seen more downward momentum, thanks in no small part to some unfavorable stock market activity. Political and economic uncertainty often sends investors running for the security of safer investments and this week seems to have some classic examples of that happening. Which means, looking back, that we’ve watched mortgage loan rate trends shift from the upward momentum that brought on rates that hit multi-year highs to the current environment that, while not multi-year lows, certainly is a welcome improvement. The most recent moves lower may be reflected in closing costs rather than actual mortgage rates (depending on the lender) but if the trend persists we’re likely to see that change soon. 30-year fixed rate conventional | more...

March 21, 2017

FHA Home Loans and Zoning: A Reader Question

By Joe Wallace

How are FHA home loans affected by zoning laws? A reader asked a question about this in our comments section recently: “I have a family who wants to purchase a home on commercial zoned property. The County has given a letter stating that they would allow the rebuilding of the residence as long as less than 75% was damaged in a disaster. The lenders are refusing to allow an FHA residential loan for the property. It is clearly residential use in commercial zoning. Whey would they refuse to abide by the rules you state?” This question is in reference to a 2011 blog post titled, “Can I Get An FHA Loan For A Commercial Property?” The FHA loan rules quoted in that post have since been superseded in their entirety | more...

March 21, 2017

Mortgage Rates Lower Post-Fed

By Joe Wallace

Since our last report, the Fed hiked interest rates. That comes as no surprise as it was widely expected to happen, and mortgage loan rates began rising ahead of that announcement as the industry began to anticipate the move. Once the Fed announcement happened, many sources point out that when rates began to fall again, it was due in part to adjustments following that anticipation. There is no single reason why mortgage loan interest rates rise and fall-any number of factors may combine to influence investors in the markets that directly affect these rates. But in the short term, single causes can and often do exert greater influences. Now that the Fed announcement has come and gone, what’s the state of mortgage rates in the short term? In general, they | more...

March 16, 2017

FHA Loan Assumptions: A Reader Question

By Joe Wallace

How do FHA loan assumptions work? There are many situations where assuming another borrower’s FHA mortgage could be beneficial to all involved. Consider this reader question we responded to recently: “My mother in law took out an FHA loan due to illness preventing her from working. The lender allowed myself and fiance to make payments on her behalf based on our income in order for her to keep the house. Is it possible for her to sign the house over to us since her health is declining?” This is a circumstance where it would definitely help to know about FHA loan assumptions and how they work. The rules for this procedure is found in HUD 4000.1, which starts off with a definition. “Assumption refers to the transfer of an existing | more...

March 14, 2017

Mortgage Loan Interest Rates Surging Higher Ahead of Fed

By Joe Wallace

Since our last report, mortgage rates have pushed significantly higher. Industry professionals are watching the Fed very carefully at the moment as it’s expected that the Fed will hike interest rates soon. Any indication of that hike, the timing of the hike, or its’ severity is sure to send investors scrambling in one direction or the other. A hike in rates is a sign that the Fed has more confidence in the economy, but as we’ve mentioned here before, what is good for the economy is often bad news for mortgage loan interest rates. We are likely to see markets react in anticipation or out of a certain set of expectations rather than the actual reality of the situation. This sort of thing has happened before, when the Fed began | more...

March 10, 2017

FHA Appraisals: A Reader Question

By Joe Wallace

This week in our comments section, a reader asked us a question about how certain aspects of FHA appraisals work. “I am pre-approved for a FHA loan, and lucked into having an estate offered to me before they list with a realtor, at a fantastic price! Problem is, it is 6 acres with an older mobile home…it was built in 1977, so meets the age requirement barely, but I have heard many different explanations as to what qualifies it as ‘permanent’, or ‘tied to the land’.” “It cannot be moved, has had permanent additions on foundations attached, and a complete roof addition over all of it, so certainly cannot be moved, and is in REALLY great condition. However, the title has NOT been retired for itso my question is, can | more...

March 8, 2017

Qualifying For An FHA Mortgage

By Joe Wallace

Why don’t some borrowers qualify for an FHA mortgage loan? A reader got in touch with us recently to ask a question along these lines: “I work at a high school, married w/baby. My credit is 640 have the 3.5% but my real estate lady says I dont qualify, FHA whats up?” Just a note for clarity: this blog is in no way affiliated with the FHA, HUD or any government agency. We report on FHA loan rules, news, and policy, but we have no connection with the agency itself. This reader question is a good example of a type of misunderstanding of the FHA loan approval process-that FICO scores alone determine your ability to get an FHA mortgage loan application approved. FICO scores are very important, and people can | more...

March 3, 2017

Are You Ready For An FHA Mortgage Application?

By Joe Wallace

If you are thinking about filling out an FHA mortgage application, there are a few questions to ask yourself before you do-if you’re ready to apply for an FHA loan, you’ll have the answers ready. How Much Down Payment Money Do You Have? In the planning stages of buying a new home, one of the most important things you can do early is determine how much home you can realistically afford. Using a mortgage calculator can help you estimate how much you need. Since FHA home loans typically require a minimum 3.5% down based on the adjusted price of the home, you can get an estimate of how much will need to be saved up to make that down payment. Know how much you’ll need-at least a rough estimate-early in | more...