Articles Tagged With: FHA Mortgage Loan

July 14, 2022

HUD Announces Appraisal Update

The Department of Housing and Urban Development official site contains an FHA Mortgagee Letter published on July 12, 2022, which announces an important update to FHA appraisal policy. FHA loan rules as published in HUD 4000.1, include a maximum age for an appraisal. If an appraisal is about to expire, FHA rules permit an extension of the appraisal validity period for 30 additional days. In some cases, an appraisal update may be permitted but that update must typically be accomplished before the original appraisal expires. Now, FHA appraisal guidelines have been revised to expand the appraisal validity period, which the FHA and HUD say will reduce “financial burdens” of getting appraisal updates. The changes are also meant to help the agency “more closely align” the FHA loan program’s initial appraisal | more...

June 30, 2022

FHA Home Equity Loans?

By Joe Wallace

Is there such a thing as an FHA home equity loan? Some borrowers want to tap into the equity built up in their home to pay bills or to make a large purchase, others may want to start home improvement projects. Conventional mortgages often come with the option of applying for a home equity loan or a home equity line of credit. What options exist for FHA borrowers? FHA home loan options don’t include a home equity line of credit or a home equity loan. You won’t find an FHA loan option that mimics these options. What FHA borrowers do have the option to apply for? FHA Cash-Out Refinancing, which allows you to take cash back at closing time if you meet the following requirements in addition to credit qualifications: | more...

June 28, 2022

What To Know About FHA Mortgage Insurance

By Joe Wallace

What do you need to know about FHA mortgage insurance? There are basically two payment plans for FHA mortgage insurance premiums; one for 11 years and one for the lifetime of the FHA loan. There is an Up Front Mortgage Insurance Premium you pay at closing time, and then there is the annual mortgage insurance premium split up over the 12 mortgage payments a year you are scheduled to make. FHA Mortgage Insurance: How Long? FHA mortgage insurance is required on most FHA loans. Streamline Refinances and certain other loans like those for homes on Native American tribal lands have a lower rate than for purchase loans and other FHA refinance options. If you pay 10% down on an FHA mortgage you may have the option of ending your FHA | more...

June 22, 2022

FHA Loans And Rising Rates

By Joe Wallace

If you need to buy a home with an FHA mortgage but you are concerned about rising interest rates, there are some things you can do to help yourself make a more informed choice about your FHA loan options. There are options to haggle with the seller, and there are loan options to consider like an FHA Adjustable Rate Mortgage. In the meantime, you can work to improve your FICO scores which helps the lender offer you a lower interest rate. When it comes to negotiating with the seller, you may find the asking price is too high in general, or you may be looking for a price offset because of rising mortgage loan rates. But it may be tough to sell the idea of a lower price. Instead, you | more...

June 16, 2022

Factors That Affect Your FHA Mortgage Interest Rate

By Joe Wallace

When the Fed meets to set monetary policy, it has the option to raise or lower the nation’s interest rates. That is a move that can directly affect some areas of the finance sector such as credit cards, but it indirectly affects mortgage loan interest rates. The Fed’s actions don’t actually change mortgage rates. Investor behavior in reaction to the Fed’s announcements, on the other hand, do have the potential to affect mortgage rates. The rate you are offered by the lender tomorrow may be affected by news and developments in the markets today. But that’s not the only factor that can affect the interest rate you are offered. At this stage for many mortgage-focused blogs, a conversation about FICO scores goes right here. It’s true that your credit scores | more...

June 15, 2022

FHA ARM Loans: Good Or Bad Idea?

By Joe Wallace

Why do people choose FHA adjustable-rate mortgages or choose to refinance with one? There are several reasons including the need to get into a lower rate upfront, as part of an overall strategy for buying and selling the home, or to take advantage of changing interest rates. ARM Loan Basics FHA Adjustable Rate Mortgages feature an introductory rate, and that rate expires after a set amount of time, typically one year. The introductory rate can also be set between three and 10 years. After that time period, the rate adjustments begin. Borrowers do better with ARM loans when they have a strategy for dealing with the rate adjustment periods. Do you plan to sell or refinance before the introductory or initial ARM loan rate expires? That plan works better for | more...

June 13, 2022

What To Know About Renovating Your Home With An FHA Loan

By Joe Wallace

FHA home loans for renovation include the FHA 203(k) Rehabilitation loan and refinance loan options. There are also FHA Energy Efficient Mortgages or FHA EEMs that allow energy-saving upgrades and improvements to the property. EEMS are add-ons allowed for most FHA home loans, not a separate loan program, and adding an EEM potentially raises your monthly mortgage payment. If you need to apply for an FHA home loan to renovate, the first thing you need to know is that on paper, FHA loan rules say you may be allowed to be your own builder or contractor. However, lender standards will apply and you may find that your FHA lender does not permit this. You’ll need to ask directly as early in the process as possible. FHA loan rules say that | more...

One-Time Close Construction Loan Options For Veterans

June 9, 2022

Questions To Ask About FHA Construction Loans And 203(k) Rehabilitation Loans

By Joe Wallace

There are FHA mortgages that let you build a home from the ground up on land you already own or purchase in conjunction with the mortgage. These are called FHA One-Time-Close mortgages. There are also FHA loans that can help you buy and renovate a home. These are called FHA 203(k) Rehabilitation loans and they are also available as an FHA refinance option. Both types of loans will require you to use escrow, hire builders, and have custom work done. And if you have never done this before, there are a few things to know going into the process. Did you know that not all builders are suitable for construction loans? Not every licensed contractor has experience with a large project such as a home renovation, and you will want | more...

June 8, 2022

HUD Announces More Fair Housing Funds

By Joe Wallace

The Department of Housing and Urban Development has been very active on the Fair Housing front in 2022. A June 2022 press release by HUD announces even more funding to combat violations of the Fair Housing Act such as illegal discrimination in the housing process. Why so much activity in 2022? It’s thanks in part to language in the American Rescue Plan of 2021, which acknowledges that “fair housing enforcement and education and outreach services are an essential component of protecting persons from housing discrimination” in the United States. The latest move in supporting fair housing enforcement and awareness? HUD’s announcement of funding support for Fair Housing organizations “working to end housing discrimination” according to the press release. The funding is made possible via the HUD Fair Housing Initiatives Plan | more...

June 6, 2022

FHA ARM Loan Options To Consider

By Joe Wallace

An ARM loan, also known as an adjustable-rate mortgage, allows you to apply for a loan with an initial rate that will increase after the introductory period is over. The lower initial rate is a benefit for some borrowers, but it pays to have a plan on how to handle this type of loan in advance–do you really plan to pay on an ARM for the full term of the mortgage? Or do you want to sell or refinance instead? FHA loan options include ARM loans which may have a one-year intro rate, but you could apply for a three-year, five-year, seven-year, or even 10-year ARM loan. That means that the introductory rate won’t change for that initial period (three years up to 10 years) and then the loan is | more...