Articles Tagged With: FHA Mortgage Loan

Home Buying, FHA Loans, And Mortgage Trends

October 2, 2023

Money, Planning, And Your FHA Mortgage

Some borrowers need help getting ready for the unexpected during the home-buying process. The unexpected can come in the form of a seller deciding they no longer want to sell the property, the borrower losing a job while the loan is on the way to closing day, or other issues. But more mundane, unexpected things crop up along the way, such as certain fees and expenses situationally related to buying a home. Not all borrowers have to pay them, but when circumstances require it, paying for unexpected contingencies like compliance inspections or hazard insurance may require you to be more creative with your finances. Do you have a contingency plan for those compliance inspections, pest control, hazard insurance, or initial property taxes that need to be settled before the home | more...

September 19, 2023

How Much FHA Loan Do You Need?

By Joe Wallace

How much can you borrow with an FHA mortgage? If you are looking at FHA loan limits as a new home buyer, it’s easy to assume those numbers represent the total amount that the lender will offer once the loan application is approved. But should you expect to borrow that maximum loan amount? FHA Loan Limits 101 FHA loan limits vary. They are not identical for all housing markets or housing sizes. There is a maximum loan amount for high-cost counties, FHA loan limits are higher for multi-unit homes, and there is a lower FHA loan limit in areas that don’t cost as much as the most expensive housing markets. What To Know About FHA Loan Limits FHA loan limits have a maximum or “ceiling” for high-cost housing markets and | more...

September 11, 2023

Things You Can Do With An FHA Mortgage

By Joe Wallace

What can you buy with an FHA mortgage? First-time home buyers and experienced home buyers who have never used an FHA mortgage sometimes wonder whether they can use an FHA loan to buy certain property types. We examine some of these issues below. Remember that state law, local ordinances, and FHA loan rules may change over time, it’s best to reexamine the rules before you start your house-hunting phase of the journey. Use An FHA Loan To Buy A Multi-Unit House One permitted use of an FHA home loan program is buying a multi-unit property. You can use an FHA mortgage to buy a house with as many as four living units. Use An FHA Loan To Buy A Multi-Unit Rental Property This is allowed by FHA loan rules. The | more...

September 5, 2023

FHA Home Loans And High Interest Rates

By Joe Wallace

Interest rates on FHA home loans, VA mortgages, and conventional equivalents are higher in 2023. Consider the rates listed in the first five days of September, when the numbers reflected rates between 6% and 7.6%. Those numbers are a serious increase from the record-setting interest rate days of 2020. Looking at just one day, 16 September 2020, we learn home loan interest rates were listed below 3% for qualified applicants. Despite the higher numbers we see in the fall of 2023, some borrowers will not wait for rates to come down. Instead, these borrowers are applying, getting approved, and buying now regardless of rates. Why do some choose to buy now? Are they taking foolish risks with their money? Not in all cases. Some borrowers enter the house-hunting process with | more...

August 29, 2023

Asking Your Lender For A Better Interest Rate

By Joe Wallace

Mortgage rates are hovering in the 7% range, and there’s no end in sight (at least in 2023) to the higher interest rates reported at the time of this writing. What is a borrower to do when faced with higher rates and the need to purchase a home? There are ways you can get a lower mortgage rate, including buying discount points (used to reduce the mortgage loan rate), improving your FICO scores ahead of your loan application, and considering an adjustable rate mortgage. But there’s another way you can get a lower rate. It’s a twofold process. You must shop aggressively for the lender who offers you the lowest rate, and then when the lender informs you what that rate might be, ask what steps might be taken to | more...

July 27, 2023

Buying A Home? Questions For Your Lender

By Joe Wallace

If you have never purchased a home before, you might be wondering how you can improve the overall experience, get good advice, and make a more informed decision on purchasing a house. One way to do that is to compare lenders (five is a good number) and ask some important questions of each one. Ask Your FHA Lender Which Loans Are Most Popular Some lenders have a lot of interest in some loans and none at all for other FHA loan options. Ask each lender, “What are the most popular mortgages you offer. Why are they so popular?” If the lender can’t offer the type of loan you need, you will need to move on. Not all lenders offer all FHA loans. Some lenders won’t issue manufactured home loans, others | more...

July 25, 2023

Which FHA Loan Is Right For You?

By Bruce Reichstein

There are some home loan options some won’t consider. A shorter loan term is one. In an era where lower monthly payments seem to be the priority for some borrowers more than saving money over the entire course of the loan, a longer loan term makes sense. But for some, these are essential aspects of the loan to consider. If you can afford to pay more each month on your mortgage, would you do so to shorten your loan term? FHA Condo Loans, FHA Manufactured Homes Are you surprised there are separate FHA loans for each property type listed above? These different loans are needed simply because each property type’s considerations differ. Manufactured homes can’t be older than regulations allow, but existing construction homes don’t have the same rule. Condo | more...

July 10, 2023

FHA Energy Efficient Mortgages In 2023

By Joe Wallace

In an older article, we discussed the FHA Energy Efficient Mortgage program, an option for those buying or building a home with an FHA loan. We decided to review the older article and note any program changes along the way. We originally wrote, “Borrowers who choose the FHA Energy Efficient Mortgage (EEM) option as part of their FHA loan can get up to $8,000 in additional funds added to the loan amount for the express purpose of adding approved energy-efficient upgrades.” Is that dollar amount still applicable? According to HUD 4000.1, the maximum amount you can borrow in 2023 is as follows: “The maximum amount of the energy package that can be added to the Base Loan Amount is the lesser of: According to the FHA loan rules in the | more...

June 29, 2023

FHA Mortgage Loans: Second Appraisals

By Joe Wallace

If you or the seller don’t agree with the results of the appraisal, is it possible to get a second appraisal and a reconsideration of value of the home? FHA loan rules specifically prohibit ordering a second appraisal just because one party or the other is hoping for a different result. HUD 4000.1, the FHA Single-Family Lender’s Handbook, states the lender is prohibited from “ordering an additional appraisal to achieve an increase in value for the Property and/or the elimination or reduction of deficiencies and/or repairs required.” FHA loan rules note the lender is permitted to order a second appraisal “for Mortgages that are in accordance with requirements on Property Flipping”. But what circumstances permit a second appraisal? HUD 4000.1 says that the original mortgagee or lender is allowed to | more...

June 27, 2023

FHA Loan Seller Concessions: What’s Allowed?

By Joe Wallace

When it is time to negotiate the price of a home using an FHA home loan, borrowers should know that sellers can, and often do, contribute to the buyer to make the deal more enticing or help the borrower reduce up-front costs. Such contributions are known as seller concessions. The FHA Lender’s Handbook says for FHA mortgages, concessions are permitted within a certain set of boundaries and are limited to six percent of the sales price of the home. Any seller contributions that exceed that six percent limit require a dollar-for-dollar reduction in the loan amount. According to FHA loan rules, “Sales concessions influence the price paid for real estate. For this reason, FHA requires that appraisers identify and report sales concessions and properly address and/or adjust the comparable sale | more...