Articles Tagged With: FHA Loans

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 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...

October 10, 2023

Common FHA Home Loan Questions

By Bruce Reichstein

Got questions about the FHA home loan journey? You are not alone. Many first-timers and experienced house hunters have questions about FHA mortgages. Here are some of the most popular. When reviewing these answers, don’t forget that some issues related to FHA loan approval are circumstantial. Your loan application is typically handled on a case-by-case basis, so it’s smart to assume your circumstances may be unique depending on what the issue is. It always helps to talk to a participating FHA lender. How Much Do I Need To Save For An FHA Home Loan? Expect a downpayment minimum of 3.5% of the sale price of the home. You should also expect to save between 2% and 6% of the total loan amount for closing costs. If you want to know | more...

October 5, 2023

FHA Loans, Bank Accounts, And Verifiable Income

By Joe Wallace

Some FHA borrowers want to know if they can use a business bank account for verifiable income purposes when applying for an FHA mortgage. Unfortunately, this question is open-ended, and the answers depend on circumstances. These issues are typically handled on a case-by-case basis. Does the business bank account belong to the borrower because he or she is a freelancer or self-employed? Is this an expense account that belongs to an employer? Such situations may have different issues affecting whether funds deposited to this account may be used as verifiable income. Those who are self-employed must provide documentation, including tax records and other paperwork that demonstrate that the income from the business is reliable and likely to continue. Freelance or contract employees would likewise be required to provide evidence that | 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...

September 21, 2023

FHA Home Loan Questions, FHA Home Loan Answers

By Joe Wallace

First-time home buyers looking for an affordable home loan often turn to the FHA mortgage. The low downpayment requirement for those who financially qualify is an option worth looking into. Many first-time FHA borrowers have questions. Here are some of the most frequently asked. Do FHA Borrowers Need A Real Estate Agent? A real estate agent is not a requirement when you buy a home with an FHA mortgage. That said, many prefer to work with a real estate agent or realtor since they can be helpful for those who don’t know the local area and to those who need help finding a home near the right services. Some house hunters are simply are not comfortable navigating the purchase of a home and in such cases a real estate agent | more...

September 8, 2023

Buying A Home With A Refinance Strategy

By Joe Wallace

For some, buying a home in 2023 is a bad idea. At least, that is the impression some get when looking at today’s high interest rates in the third quarter of the year. Some compare these numbers to the rates available a year or two ago and wonder why they should consider buying a house in today’s market. Saying no to an FHA home loan in these circumstances could be the right answer for those without a refinance strategy to help them get out of today’s higher rates as soon as lower interest rates are offered consistently. But what about those who think long-term and have a strategy to refinance their home loan as soon as it’s feasible? FHA Loans And Housing Market Competition Major news outlets reported mortgage loan | more...