Articles Tagged With: FHA Mortgage Loans

August 15, 2018

FHA Home Loans And The Accuracy Of Your Credit Reports

When you start planning for your FHA home loan and reviewing your credit reports, it’s entirely possible that you could find erroneous information in your reports. Sometimes the credit information for another person with a similar name could wind up accidentally being posted in your report, other times there may be inaccurate data in your credit history about the amount, frequency, or age of your credit account payments. How should a potential FHA borrower deal with these issues? HUD 4000.1 addresses some aspects of this issue, but not all the credit problems a borrower could experience when reviewing a credit report are covered by HUD and FHA home loan rules. HUD 4000.1, the FHA loan handbook, instructs the lender on how to proceed if the lender finds inaccuracy in debt | more...

July 19, 2018

What Is A Mortgage?

By Bruce Reichstein

What is a mortgage? To some that may sound like a totally obvious question, but for some first-time home buyers, the more information you get up front about the process of finding, buying, and owning a home the better. And that includes the most basic details of the process. FHA mortgages are an option for the serious home buyer who wants a lower down payment than many conventional mortgages and would like to enjoy the benefits of a government-backed mortgage. Why Do I Need A Mortgage? This is one of the most basic questions about the home buying process. Most people will apply for a mortgage to buy a home whether that’s an FHA new purchase mortgage, A VA home loan for qualifying military members, a USDA mortgage for those | more...

Home Buying, FHA Loans, And Mortgage Trends

June 28, 2018

What Is Good Credit? FHA Mortgage Loan Credit Score Ranges

By Bruce Reichstein

What is considered good credit? Do you know what credit score ranges are considered the best? Or which credit scores are considered marginal or even what lenders consider to be bad credit? There are specific credit score rules in HUD 4000.1 that define who may be approved for the lowest down payment for an FHA mortgage loan, and specific ranges of FICO scores that require more money down. And finally there are the credit scores that are simply not eligible for the FHA home loan program. But these ranges don’t really address what is considered to be good or bad credit. They are simply the credit score numbers that make you eligible for the lowest down payment, a higher down payment, or no FHA loan approval at all. FHA loan | more...

June 20, 2018

FHA Home Loan Mistakes To Avoid Before You Close The Deal

By Joe Wallace

If you’ve found the home you want to buy with an FHA mortgage and it looks like you are going to definitely close the deal, don’t be fooled; there are still mistakes to avoid before you sign the papers and accept the keys. One important blunder that should be avoided at all costs? Changing your financial status before loan closing-as in applying for new lines of credit, missing payments, or other issues that can have your loan officer thinking twice about approving the loan and allowing it to close. If your debt-to-income ratio isn’t ideal to start with, the addition of new credit will definitely affect your potential to close. FHA loan rules, lender standards, and other requirements all may factor into the decision on how to handles such contingencies. | more...

June 11, 2018

FHA Loan-To-Value Limits: More Rules You Should Know

By Bruce Reichstein

In a previous blog post, we discussed some of the basic loan-to-value ratio rules (LTV) for FHA loans. Your loan-to-value ratio is calculated based on the amount of the required down payment a borrower has to make as part of the FHA mortgage loan transaction. When you buy a home using an FHA mortgage, the loan-to-value ratio can be affected by your FICO scores. A higher down payment requirement means a different LTV than for those who make the lowest possible downpayment on an FHA mortgage loan of 3.5% of the adjusted value of the property. But credit score issues aren’t the only things that can affect a borrower’s LTV on an FHA mortgage to buy a new home. Some FHA loan transactions, under FHA loan policy, require as much | more...

What Credit Score Is Needed For An FHA Mortgage?

June 7, 2018

Reasons FHA Will Approve The Purchase Of A Second Home With An FHA Mortgage

By Joe Wallace

FHA loan rules in HUD 4000.1 require occupancy of the home as a condition of loan approval. This means that if you are buying, building, or refinancing a mortgage using a new FHA loan, at least one borrower obligated on the mortgage must live in the home as the main residence or home address. But there are some exceptions allowed in certain circumstances where a borrower can apply to buy another home with an FHA mortgage without selling the property originally purchased with an FHA guaranteed loan. What are these exceptions? Relocation To Another Area If a borrower’s job demands include a change of address, another FHA mortgage (without selling or paying off the first FHA loan) may be possible. This is permitted when the borrower is “relocating or has | more...

May 17, 2018

FHA Loans For Self-Employed Borrowers

By Joe Wallace

Are there FHA home loans for self-employed borrowers? There’s a persistent myth about FHA loans and self-employment; that working for yourself is a serious disadvantage when it comes to home loan approval. What’s the reality? FHA Home Loans Are Available For Financially Qualified Self-Employed Borrowers FHA loan rules in HUD 4000.1 state that being self-employed is an acceptable form of primary income as long as that income meets certain criteria. Borrowers will be required to furnish tax returns, business plans, profit-and-loss statements and other documentation as required by the lender to verify income. It may take some extra time to gather all the required information your lender needs, but you should come to the application or preapproval process knowing how your income has changed over time. Self Employment Minimum Requirements | more...

May 15, 2018

FHA Home Loans And Occupancy Requirements

By Bruce Reichstein

What are the occupancy requirements for FHA home loans? Like many government backed loans, there are general occupancy requirements a borrower must follow as a condition of loan approval. Whether you are buying an existing construction home or having one built for you using an FHA One Time Close construction loan, some guidelines for occupancy will apply. FHA Definition Of Occupancy, Principal Residences FHA loan occupancy rules basically require that the borrower live in the home full time, using it as the primary residence or principal residence instead of a vacation home, time share, or other intermittent occupancy arrangement. How does the FHA specifically define “principal residence”? According to HUD 4000.1: “A Principal Residence refers to a dwelling where the Borrower maintains or will maintain their permanent place of abode, | more...

May 14, 2018

Am I Eligible For An FHA Home Loan If I Am In A Credit Counseling Program?

By Joe Wallace

Are potential FHA borrowers eligible for an FHA home loan if they are participating in a credit counseling program? This is a question on the minds of some borrowers trying to fix credit issues and repair past mistakes or problems associated with their credit. Borrowers should always work on their credit, counseling program or not, before applying for any major line of credit such as a mortgage or auto loan. The FHA and HUD even offer referrals to local, HUD-approved housing counselors for borrowers looking for pre-purchase advice including credit tips. (You can call the FHA directly at their toll-free number, 1-800 CALL FHA for these referrals). Some borrowers choose a formal credit counseling program in order to work on credit repair issues, and there is an understandable concern that | more...

May 8, 2018

VA One-Time Close Construction Loans Compared To FHA One-Time Close Loans

By Bruce Reichstein

How do VA One-Time Close / Single-Close construction loans compare to their FHA One-Time Close (OTC) / Single-Close counterparts? If you don’t know which program you qualify for, now is a good time to learn the differences and similarities. FHA And VA One-Time Close / Single-Close Construction Loans Requirements Some things will apply to both FHA and VA One-Time Close construction loans. For both types of loan, all borrowers must financially qualify, they must have minimum FICO scores as determined by both the VA/FHA and the lender, and the property must be constructed in the United States or its’ protectorates. VA One-Time Close and FHA One-Time Close loan rules both require occupancy; you may only have a home built from scratch using a VA construction loan if you intend to | more...