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Articles Tagged With: FHA Mortgage Loans

FHA Loans And Work Permits: A Reader Question

Are work permits required for FHA loans when the applicant is a legal permanent resident alien or non-permanent resident alien? A reader asks, “So if a person had a work permit but never renewed it, but has been doing taxes with his/her ss# and is currently working does that mean there not qualify for FHA? Or does the legal status have to be current?” FHA loan rules in HUD 4000.1 are clear that a borrower is not required to be a U.S. citizen in order to qualify for an FHA mortgage loan. However, legal status is required-those in the United States illegally cannot qualify for an FHA loan. For permanent resident aliens, HUD 4000.1 states: “A Borrower with lawful permanent resident alien status may be eligible for FHA-insured financing provided | more...

 
Happy Columbus Day 2019

FHA Mortgage Facts You Should Know

FHA mortgage loans are a very good option for borrowers looking for a lower down payment and less stringent credit requirements than conventional mortgages. Did you know that FHA home loans do not feature a minimum or maximum income requirement? A borrower’s ability to qualify for an FHA mortgage depends on FICO scores, debt-to-income ratios, credit history, and other factors but there’s no “qualifying dollar amount” for income in terms of minimums OR maximums. Some believe that FHA mortgages are only for first time home buyers, the economically disadvantaged, or only for typical suburban homes. But FHA home loans are available to anyone who is financially qualified and wants to use the property to be purchased as their primary residence. FHA mortgages require only a 3.5% down payment in typical | more...

 
What You Need To Know About Your FHA Home Loan

FHA Loan Rules: Who Can Sell You The Home?

FHA requirements and FHA loan rules are designed to protect the lender in some cases, the borrower in others, and sometimes both at the same time. The FHA appraisal process, for example, is designed to insure that the home will be viable for the entire lifetime of the mortgage. That protects the bank’s investment and the borrower’s ability to refinance or sell the property later. One set of FHA loan rules that seems to a have a definite consumer-friendly intent has to do with who is eligible to sell you the home you want to buy with an FHA loan. HUD 4000.1, the FHA single family home loan rule book, has a section that outlines basic requirements for FHA mortgages. Those requirements include controls on who may sell you the | more...

 
Mortgage Loan Rate Trends

Mortgage Rate Trends: Going Lower Again

Since our last report, the mortgage rate trend has swung back to improvements, taking back loses incurred last week and dropping hints that things could be settling into a new range. It’s still early days yet, but industry professionals are talking about these gains in association with weaker stock market performance, talk of European economic issues, and bond market activity. If the current trend persists, we might see rates (best execution) at or near current levels, giving those inclined to float a better picture of where things could go if upward pressure resumes. If you haven’t made a mortgage rate lock commitment with your loan officer, at present it might be easier to set your cut-off; if you decide to “float” until rates improve or cut your losses and lock | more...

 

Income Documentation: A Reader Question

A reader got in touch with us this week to ask a question about the FHA requirements for income documentation: “I work on a commission basis where a large part of my income does not appear on my w2. Say I make 4,000.00 in commission my expense to do my job is 1,000.00 my employer will write a check to me for that amount and them deducts it from my 4000.00 commission and then I am taxed on the remaining 3,000.00.” “I am at the end of the loan process and the underwriter is requesting a letter of explanation from the employer and she will not respond. Does she have to legally comply and how long can she take?” Unfortunately this falls dangerously close to asking for legal advice, and | more...

 
Happy Holidays 2018

FHA Short Refi Loans in 2017?

HUD 4000.1 is the FHA single family home loan rule book. Whether you are purchasing a suburban home, a condo unit, or a mobile home with an FHA mortgage, the rules in HUD 4000.1 pertain to your FHA loan transaction. This set of rules also includes guidance on FHA refinancing loans including a program known as an FHA short refi loan, also called “Refinance of Borrowers in Negative Equity Positions Program”. This program, according to HUD 4000.1, “allows the Mortgagee to refinance a non FHA-insured Mortgage in which the Borrower is in a negative equity position”. That’s commonly known as being “underwater” on a home loan. An FHA short refi requires the lender to “write off at least 10 percent of the unpaid principal balance”. The borrower must be in | more...

 

FICO Scores And FHA Loans

Your credit report and FICO scores are very important factors when it comes to getting an FHA loan approved. Do you know what your FICO score is and how it affects your home loan? The U.S. government’s consumer watchdog agency, the Consumer Financial Protection Bureau, has a definition of FICO scores on its’ official site, which includes the following: “A FICO score is a particular brand of credit score. A credit score is a number that is used to predict how likely you are to pay back a loan on time. Credit scores are used by companies to make decisions such as whether to offer you a mortgage or a credit card. They are also used to determine the interest rate you receive on a loan or credit card, and | more...

 

FHA Loan Basics: A Reader Question

A reader asks, “I really don’t understand why i have to pay PMI and MIP. I had credit problems a bankruptcy in 2013 , it was recorded and its been almost 4 years and my score is 709 that the middle score i have hardly no debts, 6% of income. I was told I have to pay the MIP up front of 1.75% and also 240 PMI monthly with mortgage. That’s a little too much, is there a way out of this? I also did not want taxes and insurance added, I’m putting 3.5 percent down. My loan officer said I had to pay the insurance and add taxes to my loan.” It’s not entirely clear from this reader question whether the loan is an FHA mortgage or not, but | more...

 

FHA Loan Rules On Property Acceptability

If you want to purchase a home with an FHA loan in 2017, the property you decide to buy must pass an FHA appraisal process designed to insure the property physically meets certain minimum standards. The foundation, the roof, the sewage and electrical systems must all meet FHA requirements, plus state/local building code, etc. But the FHA loan rulebook, HUD 4000.1, also spells out some basic property acceptability criteria. For example, the rule book begins by stating that FHA loans are only for properties located within the continental U.S. or its territories. “The Property must be located within the U.S., Puerto Rico, Guam, the Virgin Islands, the Commonwealth of the Northern Mariana Islands, or American Samoa”. HUD 4000.1 has restrictions on properties located in certain types of flood zones, coastal | more...

 
FHA One-Time Close Construction Loans In 2019

FHA Loan Assumption Processing Fees

One of the benefits of FHA home loans is the ability to let another person assume the loan, with the participation of the lender. Most FHA loans today may be assumed by another person as long as the lender is involved in the process. Loan assumptions do have closing costs, including a processing fee. The FHA official site has announced changes in the processing fee structure for FHA loan assumptions. According to FHA Mortgagee Letter 2016-24, the agency’s maximum fee of $500 for processing an assumption where a credit check is required hasn’t been modified, “since it was established in the now superseded Handbook 4330.1 REV-5, Section 4-4A.2, dated September 29, 1994. As mortgagee expenses have risen since the maximum processing fee was established, it is appropriate to establish a | more...