Articles Tagged With: FHA Loans

Getting An FHA Mortgage After Bankruptcy

June 5, 2024

Buying Older Real Estate With An FHA Mortgage

Interested in buying an old house? A fixer-upper? Does the house you fell in love with need extensive repairs to make it worth owning? FHA loans include options for older homes and fixer-uppers. We cover some key points below. FHA Loan Options Are More Flexible Than You Might Think There’s no single FHA mortgage option. You can’t use one loan to buy any property type that is allowed. There are just too many different options and needs that must be taken into account in the housing market. Want to build a home from the ground up? There’s an One-Time Close FHA construction loan for that. Want to buy an old property and rework it into a newly renovated home? There are FHA loan options for that choice, too. If you find | 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...

May 7, 2024

Is My Credit Good Enough For A Mortgage?

By Joe Wallace

One of the most commonly asked questions about any home loan program including FHA mortgages? “Is my credit good enough?” It’s a great question, but for some applicants, it’s not asked soon enough in the process to make much of a difference. The truth is if you start working on your credit the moment you decide to commit to purchasing a home in the future, the better. And that’s because there isn’t just a single FICO score to aspire to or a single set of tasks to perform so you can be “ready”. What does it take to qualify for any home loan? A combination of factors including your FICO scores, loan repayment history, credit utilization, and employment stability. That’s what it takes to qualify for ANY mortgage. What does | more...

April 18, 2024

Mortgage Borrowers At Risk In 2024?

By Joe Wallace

Are FHA mortgages and other types of mortgages riskier in 2024? The answer may be YES thanks to a currently elevated potential for mortgage fraud initiated by scam artists. Fraud prevention company Funding Shield reports high fraud vulnerability in roughly half of all “portfolio loans,” including residential mortgages, in the first three months of 2024. According to HousingWire.com, such problems seem to arise due to a “lack of appropriate controls” related to closing procedures. In some cases, these problems are not related to a residential real estate borrower or seller, but for one specific aspect of the mortgage process, FHA mortgage loan applicants may be at an elevated risk. Wire Fraud Scams And Your Mortgage The Funding Shield report includes data about closing cost-related wire fraud vulnerabilities. Those potential problems | more...

April 1, 2024

Home Loans In 2024: The First Quarter

By Joe Wallace

The first quarter of 2024 was a positive one for some house hunters. But many are wondering if rates will get closer to the mid to lower 6% range soon and whether to wait until that happens to start planning for a new FHA mortgage. A CNBC news report on mortgages published in the first quarter says there was higher demand in first three months of 2024. Higher demand potentially means higher sale prices, but not always. This year, it’s likely that is one of many contributing factors to the current rate environment. Did the supply rise to meet demand in Q1? CNBC notes that inventory went up nearly 6% overall. That meant as many as a million houses were for sale at the end of February. Home Sales Up | more...

March 20, 2024

What To Know About FHA Loans And Escrow

By Joe Wallace

FHA loans typically involve some form of escrow. Some FHA loans have different escrow requirements than others and you should know what your specific loan type will require before you commit. What Is Escrow? Finance blogs often describe escrow as an arrangement where a third-party account retains money to facilitate a home loan. It’s done on behalf of the borrower and lender and money comes out of the account based on specific conditions or instructions. You can expect to use escrow to pay for property taxes, paying contractors for labor or materials, and even earnest money if you and the lender agree. Escrow provides a layer of protection for both borrower and lender and it pays to know as much as you can about how it works before you commit | more...

March 19, 2024

First-Time Home Buyers May Benefit From Proposed Tax Credit

By Joe Wallace

A new mortgage tax credit proposal from the Biden administration could make buying a home more affordable for first-time home buyers. The President’s proposal includes a credit potentially worth up to $10k per homeowner for qualifying transactions. If the plan is approved, those buying starter homes and/or first-time home buyers could get into a more affordable mortgage. Why Now? According to RedFin, 2023 was the least affordable year to try to purchase a house. In 2023, those making approximately $78,000 “would have spent 41.4% of earnings by purchasing a median-price home at $408,806, up from 38.7% in 2022” according to a report by RedFin. And many American homeowners today pay on loans with mortgage interest rates lower than those currently available for purchase or refinance. That would tend to make | more...

March 14, 2024

Is It Time To Buy A Home With An FHA Mortgage?

By Bruce Reichstein

Some borrowers are not sure if they are truly ready to buy a house with an FHA mortgage. Not in the financial sense. For this article, we do not mean “ready” in the sense that a borrower has saved a down payment, worked hard on credit, and has a budget plan that includes the new mortgage payment. In this article, being “ready” means deciding to stop renting and start owning a home. Running The Numbers Before You Shop Get a calculator ready if you need to answer the rent-versus-own question. Compare the current rental options with the cost of owning. Ask yourself, how much is your rent? What about renter’s insurance, monthly utility expenses, and other costs like parking and trash removal? How does that amount compare to the costs | more...

February 29, 2024

FHA Mortgage Loan Rates And Cash To Close

By Joe Wallace

If you want to buy a home using an FHA mortgage, the required minimum cash to close is one of the things you must plan and save for in the beginning stages of the loan. Some view the rates and costs as being separate…at first. Some borrowers quickly learn that FHA loan closing costs and the interest rate your lender offers may be more related than they realize. Much depends on which options the borrower decides to pursue. FHA Home Loan Closing Costs Your FHA loan cash-to-close requirements include the lender’s fee, your down payment, and other expenses such as the upfront mortgage insurance premium. Some costs you can finance. One is the FHA upfront mortgage insurance premium. Other expenses cannot be added to the loan amount. That said, a | more...

February 12, 2024

FHA Loan Costs: Questions Answered

By Joe Wallace

Some borrowers don’t realize they are permitted to finance certain costs into an FHA home loan. This can help save money out of pocket in the earliest stages of the loan, making it easier to afford the basic initial costs of buying property. Adding more to your home loan can make your monthly payments higher, but for some, that may sound like a good trade-off for saving money upfront on the transaction. Some borrowers feel any addition to their baseline monthly payment needs justification and want to avoid adding to the loan wherever possible. Choose any FHA loan add-ons carefully. Be sure to ask the lender about each addition to your mortgage. How will it increase your monthly payment? Can I Finance FHA Required Mortgage Insurance? Yes, but with caveats. | more...