Articles Tagged With: FHA Loans

January 20, 2022

Using Military Pay To Qualify For An FHA Mortgage

Some house hunters have questions about the ability to be approved for an FHA mortgage using military benefits as qualifying income. What will a participating FHA lender consider and what will they reject? Much depends on the nature of the benefit and whether it is likely to continue. Why would currently serving military members or military veterans consider an FHA loan instead of using their zero-down VA home loan benefit? There are several reasons why the FHA loan might be a choice these buyers make–some might want to save their VA loan for a bigger home, or they may have already used their VA loan entitlement in an earlier purchase. To qualify for any home loan you need verifiable income. Military income is not a lump sum payment for services | more...

January 19, 2022

Is A Second FHA Loan Possible?

By Joe Wallace

Is it possible for borrowers to apply for second FHA loans, resulting in paying on two mortgages at once? Here is a variation on a common reader question about this issue: “I relocated to another state over 400 miles away. Will I be able to get an FHA loan even though I still own my first home?” There’s no one single answer to a question like this. Aside from FHA loan rules, a borrower’s credit rating, loan repayment history, and debt-to-income ratio may all play a part in whether a lender is able to approve or deny an FHA loan. In cases like these, one of the most important factors would be (all other considerations aside) focused on the borrower’s debt-to-income ratio. With an existing mortgage payment, will the borrower | more...

January 18, 2022

Home Loan Myths: 20 Percent Down Payments

By Bruce Reichstein

Why do people still believe you MUST make a 20% downpayment on a home loan? Like other persistent home loan myths (including the one that holds that FHA mortgages are ONLY for first-time homebuyers), the 20% issue has been passed along to unsuspecting first-time home buyers for decades. What is the reality? FHA mortgages require 3.5% down at a minimum. That’s for borrowers who financially qualify with FHA and lender credit score requirements. FHA loan rules in HUD 4000.1, the FHA Single-Family Lender’s Handbook, says that 580 or better is the FHA standard. You will need to ask the lender you choose whether there are higher FICO score requirements with that financial institution. (There often are.) With conventional mortgages, 20% down is typically required for borrowers who want to avoid | more...

January 10, 2022

Buying Your Very First Home With An FHA Mortgage

By Joe Wallace

If you are buying your first home, published reports say you aren’t alone. In December of 2021, a Marketwatch article noted that in 2021, the number of first-time homebuyers increased from 31% to 34%. That information comes via the National Association of Realtors, which also notes that historically, some 40% of buyers have traditionally been first-timers. Do you need a first home or starter home? Those who buy with FHA mortgages are in a good position to buy thanks to lower down payment requirements–only 3.5% for those who financially qualify. Lower down payments can help in ways some don’t expect–such as having more money to pay closing costs and other expenses related to buying a home. Down payment assistance programs in your local area may be able to offset the | more...

December 28, 2021

Don’t Get Scammed When Refinancing Your FHA Mortgage

By Joe Wallace

Are you considering an FHA Cash-Out Refinance loan in 2022? What about your options under the FHA Streamline Refinance program or the Home Equity Conversion Mortgage option for qualifying borrowers aged 62 or older? Each of the refinance loan options above could be used as a tool by scammers to try to fool you into paying money to someone other than your lender. All it takes is a “spoofed” e-mail that looks like it came from a legitimate source or a text message from a number you don’t recognize and some people are on the hook. Others know to look for the signs of a scam and avoid trouble by spotting the signs. How many unsolicited e-mails, junk mail, and robocalls do you get each month associated with some kind | more...

December 23, 2021

FHA Loan Applications In 2022

By Joe Wallace

Are you one of the many house hunters planning on filling out FHA loan applications for 2022? Are you ready to apply? Here are some tips to help you determine how close you might be to the application stage of a new FHA mortgage. Credit Reports Do you know the contents of your credit reports? Do you know your FICO scores? If not, you’ll need some additional time before applying for your home loan to review your credit, see what the lender may see, and determine whether your credit history is free of errors or evidence of identity theft. If your credit report shows erroneous information or if you suspect identity theft based on questionable entries on your report, you will need additional time prior to your FHA loan application | more...

December 21, 2021

FHA Home Loan Approval Issues You Should Know

By Joe Wallace

If you are planning to buy a home with an FHA mortgage but aren’t sure whether you will be approved for the loan, you might find some help with our list if important FHA loan issues to consider as you plan and save for your mortgage. How Much Time You’ve Spent Working Your participating lender will review your employment history. Basically, they want to see how much time you have in your current capacity as a full-time employee earning salary, commission, or a combination of those. If you are self-employed, how long have you been working in that capacity? That will be an important factor for the lender. Your loan officer must review the last two years of your work history. Does that require you to have two years of | more...

December 9, 2021

Do You Need Down Payment Assistance For Your Mortgage?

By Joe Wallace

If you want to buy a home and you worry about the down payment, you may be able to get help from a state or local down payment assistance program offered in your housing market. If you are considering an FHA mortgage, you should know that the FHA itself does not offer down payment help, but does recommend borrowers seek such programs to help lower the overall upfront cost of the mortgage. What kinds of down payment help is available? There are many options depending on the state where you live and whether or not you have owned property recently. One issue that is common for many state-level down payment assistance programs? Being either a first-time homebuyer who has never owned a home before, OR being a former homeowner who | more...

December 2, 2021

Why Are FHA Home Loan Limits Higher In 2022?

By Joe Wallace

FHA is required by a federal law known as the National Housing Act (NHA) (and its’ amendments found in the 2008 Housing and Economic Recovery Act) to establish FHA home loan limits. These limits are announced close to the end of the previous year in anticipation of the new year. Those limits are set at 115 percent of area median house prices, with a low-end limit (the “floor”) and an upper limit (the “ceiling”) for FHA loan limits. There’s an annual review of these limits to see if they should be adjusted due to economic factors or other variables. In the first week of December 2021, the Federal Housing Administration announced higher FHA loan limits for the year 2022, and those higher limits are effective for both forward mortgages/purchase loans | more...

November 29, 2021

New to FHA Loans? Things You Need To Know

By Joe Wallace

What are the FHA loan basics you should know as a first-time homebuyer? The first thing you should remember is that FHA loans are not restricted to first-time buyers, but there ARE state-level down payment assistance programs and closing cost assistance programs that may be able to help you with your FHA mortgage as a first-time buyer. Those programs can help save you thousands of dollars in up-front costs on the down payment and other expenses with your loan. Remember that FHA loans permit your seller to contribute up to six percent of your closing costs as an incentive to close the deal, but any amount valued above that six percent results in a dollar-for-dollar reduction in the FHA loan amount. First-time home buyers are sometimes not aware that they | more...