Articles Tagged With: FHA Mortgage Loans

What happens to my FHA loan in a natural disaster?

June 25, 2015

FHA Loan Debt To Income Ratios

Are you concerned about your debt to income ratio going into the FHA loan application process? Do you wonder how your chosen FHA lender will view your existing debts and whether debts that are scheduled to be paid off at some point in the near future might affect your FHA loan application? It helps to know what the FHA loan rulebook says about a borrower’s overall credit worthiness. At the time of this writing, the FHA and HUD are preparing to transition to a new FHA loan rulebook, but the previous references still apply until then. On the FHA official site you will find HUD 4155.1, which includes a section in Chapter Four about how the lender is to analyze the borrower’s credit. That section says in part: “When analyzing | more...

June 17, 2015

FHA Mortgage Loan Rates: Post-Fed, Moving Lower

By Joe Wallace

It’s been a tricky week for mortgage loan rates in general; rates seemed to be in a “defensive” position ahead of the highly anticipated Fed announcement which happened today–that announcement had major power to influence rates higher or lower depending on the contents of the statement and investor reaction to it. So what happened with rates today? According to several sources, certain markets that influence mortgage rates were weak in the morning, which sent some lenders to adjust their rates accordingly. Once the Fed had made its eagerly awaited announcement, rates began moving back the other way. Why? The Fed could have announced an interest rate hike today, which can and often does (when it occurs) have a negative effect on mortgage rates. But instead, the Fed declared that while | more...

June 15, 2015

FHA Refinance Loan Options: FHA-To-FHA, Non-FHA to FHA

By Joe Wallace

Is now the right time to refinance your mortgage with an FHA loan? Many are considering their options, but if you don’t know the possibilities offered by an FHA refinance loan, now is a good time to get caught up on what’s available for owner-occupied single family home loans. FHA single-family home loan refinancing is available for both existing FHA loans and non-FHA mortgages. Your current loan can be an FHA, VA, conventional, or any other type of home loan that meets FHA program requirements for refinancing. Borrowers applying for any type of single family FHA home loan must be owner-occupiers of the property securing the new loan. For existing FHA loans, there is an option for cash-out (appraisal and new credit check required), no cash out (an appraisal and/or | more...

June 9, 2015

FHA Loan Rules For Down Payments

By Joe Wallace

FHA home loans come with a maximum financing limit–a borrower is required to pay a certain percentage up front as a down payment. There is no such thing as a zero-downpayment FHA home loan, but the amount of the minimum is much lower than conventional loans in typical cases. FHA loan rules specify a minimum 3.5% down payment, but in some cases that down payment may be higher depending on circumstances. What kind of circumstances? One is a situation where the borrower’s FICO scores or other financial qualifications are borderline. FHA minimum FICO standards for maximum financing and to be eligible for the 3.5% down payment start at 580 and above. Your lender may actually have higher FICO requirements than 580 and that is permitted under FHA loan rules. Borrowers | more...

June 5, 2015

FHA Mortgage Rate Trends: Slightly Better

By Joe Wallace

Mortgage loan rates pushed into year-long highs recently and we’re monitoring headlines for important developments like the scheduled jobs report that’s due out on Friday with potential to help or hurt mortgage rates depending on both the contents of that report and investor reaction to it. Yesterday we reported best execution mortgage loan rates for 30-year fixed rate conventional loans having broken the 4.0% barrier after spending a great deal of time earlier this year at sub-four percent rates. Going into the low fours seems like a dramatic move higher, but compared to rates in years past, these numbers are still low…but the upward pressure makes those who have gotten used to seeing those best execution rates below four percent a bit nervous. There is much anticipation of the jobs | more...

May 30, 2015

Common Myths About FHA Home Loans

By Joe Wallace

FHA loan myths are hard to dispel–no matter how many times you try to set the record straight, there will always be people who simply don’t know the truth about FHA loans and how they can help the typical house hunter. For example, some people mistakenly believe that FHA loans are only for the economically disadvantaged. Others believe something similar along these lines–that it is possible to “earn too much” to qualify for an FHA mortgage. These things are not true. Another myth about FHA home loans is that a borrower’s eligibility is solely dependent on what the FHA loan rules say about FICO scores, credit history, etc. But this is also not the reality behind the FHA home loan process. For example, FHA mortgages do have a minimum FICO | more...

May 11, 2015

FHA Loan FICO Score Standards For Mobile Home Loans: A Reader Question

By Joe Wallace

A reader asks, “Can you advise if I can obtain a loan with a credit score of 564. I want to purchase a mobile home” This is such a common question–many borrowers want to know if their FICO score is good enough to qualify for an FHA home loan. The answer is that it all depends on the lender. FHA FICO score minimums, as published in the FHA loan rules in HUD 4155.1, technically allow a borrower with a FICO score above 500 to apply for an FHA loan. Borrowers with FICO scores below 580 but above 500 do not qualify for maximum FHA financing–these applicants would be required to apply for a loan with a higher down payment than those applying for a loan with FICO scores above 580. | more...

May 6, 2015

FHA Loans And Interest Rate Trends: The Interest Rate Lock

By Joe Wallace

FHA home loans, like their conventional mortgage counterparts, feature interest rates that must be negotiated between the borrower and the lender. HUD 4155.1 Chapter One verifies this, stating: “Under all currently active FHA single family mortgage insurance programs, the borrower and the lender negotiate the interest rate and any discount points”. In recent days at the time of this writing, FHA and conventional mortgage rates have been in a state of flux, moving higher due to upward pressure from overseas economic developments and other factors. FHA borrowers may wonder how they might be protected from further increases in mortgage loan rates, should they occur, once they have committed to an FHA home loan. That is where something called the interest rate lock comes into play. The lender and borrower can | more...

April 30, 2015

Recent Changes to FHA HECM Due And Payable Rules

By Joe Wallace

Recently the FHA and HUD announced further changes to the FHA Home Equity Conversion Mortgage or HECM loan program. There have been a number of alterations and adjustments to the FHA HECM loan program in the last year or so, and the new changes further clarify the rules for certain aspects of the HECM program. In this case many of the rule changes have to do with the procedures for declaring a HECM loan due and payable. According to FHA Mortgagee Letter 2015-10, “For HECMs that are due and payable, the Due Date is the date when: –the mortgagee notifies the Secretary that the mortgage became due and payable without HUDs approval; or–the Secretary approves the mortgagees request to call the mortgage due and payable. For HECMs with a Case | more...

April 28, 2015

FHA Mortgage Rate Trends: Higher Ahead Of Fed Announcement

By Joe Wallace

Mortgage loan rates shot up to highs we haven’t seen in around a month–Tuesday rates pushed higher ahead of two important economic data releases on Wednesday that have potential to push mortgage loan rates in one direction or the other depending on investor reaction to the contents of those releases. Wednesday morning sees the release of numbers from the first quarter Gross Domestic Product report (in the morning) and an announcement from the Fed (in the afternoon). The Fed event will be watched carefully as markets will react to any news that indicates whether or not the Fed intends to raise interest rates. That would have an effect, depending on how investors respond to the information, of pressuring rates higher or giving them a chance to recover from today’s move | more...