Articles Tagged With: FHA Mortgage

August 23, 2024

What To Know About Credit Before You Apply For An FHA Mortgage

Credit history and FICO scores will be key factors when your FHA lender reviews your home loan application. For first-time homebuyers, the path to owning a home can be complicated early by credit problems, and knowing to avoid some common credit pitfalls is key. We examine some of the major points below. Prioritize Your Credit Report FHA lenders will review your credit reports from the three major credit bureaus to assess your creditworthiness and determine your interest rate for the FHA mortgage. New homebuyers must regularly monitor credit scores and reports for evidence of problems, errors, and identity theft. These, even if not your fault, can reduce your credit score and jeopardize loan approval. Start by requesting free copies of your reports from the official website, AnnualCreditReport.com, and review those | more...

August 7, 2024

Qualifying For FHA Loans and VA Mortgages

By Joe Wallace

When applying for a government-backed home loan like a VA or FHA mortgage, it’s important to know how your credit issues may affect your ability to be approved for a residential mortgage loan. Knowing which potential credit problems you may need to correct (as early in your house-hunting journey as you can) can greatly benefit you before loan application time. Some borrowers don’t believe they have credit issues. However, they sometimes change their minds after reviewing credit reports due to errors, items that should have fallen off the report ages ago, and evidence of identity theft. Credit problems such as undischarged bankruptcy, a recent foreclosure, or delinquency on federal debts might hurt your chances of securing an FHA or VA-backed mortgage. To be approved for a mortgage, expect to spend | more...

August 6, 2024

Credit Repair And FHA Mortgages

By Joe Wallace

Resolving outstanding debts and making timely payments can gradually boost your credit score. The Consumer Financial Protection Bureau recommends creating a budget and prioritizing debt repayment to regain financial stability. It’s also vital to monitor your credit reports aggressively at least 12 months before applying for a home loan. Knowing your rights when dealing with credit repair companies is essential. The Credit Repair Organizations Act (CROA) ensures transparency in credit repair services and prohibits deceptive practices. When it comes to home loans and your credit, lenders consider your FICO scores and review your payment history and overall credit record. It’s important to understand that FICO scores don’t necessarily reflect your entire credit story. To have a successful home loan application, maintain good payment habits for 12 months and avoid missed | more...

July 29, 2024

FHA Loans And Multi-Unit Properties

By Joe Wallace

FHA home loans are intended for owner-occupiers. The FHA loan occupancy requirement states that the borrower must begin using the home purchased with an FHA loan within a specified time after closing (usually within 60 days.) But FHA loan rules also permit owner-occupiers to buy multi-unit properties. For multi-unit homes, the borrower must occupy at least one unit but is free to rent out the unused spaces in the house to others. FHA loan rules limit the number of units to four in these transactions. If a borrower intends to apply for an FHA loan for a home with multiple units, it may be tempting to try to convince the lender to factor in any potential income from such rental as part of the applicant’s debt-to-income ratio. Is this permitted? | more...

July 25, 2024

HUD Proposes Final Rule on Sale of Delinquent FHA Mortgages

By Joe Wallace

The U.S. Department of Housing and Urban Development (HUD) has proposed a new rule to oversee the sale of delinquent single-family mortgage loans insured by the Federal Housing Administration (FHA). This initiative aims to increase the availability of affordable housing and enhance community stability. According to HUD.giv, this move is part of the Biden-Harris Administration’s commitment to “expanding affordable housing options,” and the proposed rule is intended to assist struggling homeowners. Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon was quoted in a HUD press release about the proposed rule. Gordon notes the proposed rule is meant to create stability. It establishes standardized regulations for future delinquent home loan sales and prioritizes neighborhood stabilization. HUD has been experimenting with selling off delinquent mortgages since 2002. The July 2024 | more...

July 17, 2024

FHA Loans: What To Do After Closing Day

By Joe Wallace

Buying your home with an FHA mortgage involves finding the right lender, making a down payment, saving for and paying closing costs, and taking the keys to your new home on closing day. However, it’s crucial to anticipate potential challenges that may arise after moving in. Did You Get A Home Inspection And An Appraisal? It’s highly recommended that you get a home inspection as a standard part of buying a house. Making the purchase contingent on the inspection and appraisal outcomes can offer protection that you won’t realize until long after closing the loan. While an FHA mortgage safeguards against lower appraised values through an “escape clause” for situations where the house appraises lower than the asking price, adding a contingency clause for inspection issues is wise. Inspectors might | more...

July 16, 2024

Do You Need Help Understanding Your FHA Loan?

By Joe Wallace

The variety of FHA home loan programs, including construction loans and reverse mortgages, can be overwhelming for many borrowers. HUD-approved housing counseling offers invaluable support to help borrowers make informed decisions about these complex programs. You can get a free referral to a HUD-approved housing counselor by calling 1-800-CALL FHA. FHA Loan Counseling: Your Path to Homeownership The Federal Housing Administration (FHA) insures mortgages, reducing lender risk and expanding access to homeownership for individuals with lower credit scores or limited down payment funds. However, understanding the nuances of certain FHA loans, such as reverse mortgages and construction loans, can be challenging. Did you know you can call HUD to get a referral to an approved housing counselor to help you through the process? Housing counselors can help you in the | more...

July 3, 2024

Planning Your First Home

By Joe Wallace

Are you looking for your first home? Applying for an FHA loan might seem intimidating, but there are some things you can do to help reduce those feelings of being overwhelmed by unfamiliar details. This is especially true in an age of confusing information about changing interest rates, modified credit qualifying standards, and options to save your home if disaster strikes. Start Early The key is to start early and plan ahead. Before you fill out loan application paperwork, consider making your planning phase for the loan last a year or more. This takes some immediate pressure off borrowers to save up for the down payment and closing costs. It also provides adequate time to work on your credit and cut your monthly debt. What other things can first-time home | more...

July 1, 2024

Comparing Home Loan Offers

By Joe Wallace

Are you planning to buy a new home? You can find the right home loan by applying a similar process you use to find the right house. In fact, shopping around for the right mortgage loan is just as important as shopping around for the right house. If you are considering an FHA mortgage to buy, renovate, or build a home, you’ll want to make the same kind of informed decisions about the lender and the loan. Comparing lenders and loans is the way to do that. But there are some tips you can follow to make that process more streamlined. Research Multiple FHA Lenders While on paper, FHA loan terms and conditions such as FICO score requirements seem to be standardized, the FHA minimum FICO score requirements are just | more...

June 27, 2024

What You Can Do With Your FHA Home Loan

By Joe Wallace

Borrowers sometimes assume things about home loan programs that aren’t entirely accurate. In the same way some assume that FHA single-family home loans can be used to buy an investment property (they cannot) or that the FHA loan program requires you to be a first-time home buyer, there are flawed assumptions about the kinds of home you can buy with an FHA mortgage and the acceptable uses of these home loans. FHA Loans To Build A Home The FHA One-Time Close construction loan is what borrowers choose when they want to build a home from the ground up. These FHA mortgages also allow land purchase with the loan if you don’t already have it to build on. FHA Loans Can Be Used To Install A Home FHA loans can be | more...