Articles Tagged With: FHA Mortgage

May 31, 2022

FHA Loans And Home Equity

How soon do you need to start thinking about home equity? Believe it or not, you start making decisions about equity right away in the planning and saving process of your loan. How? The amount of money you save for a down payment is a decision that directly affects the amount of the loan you want. The bigger your down payment, the more potential equity you could start out with. Essentially your home’s equity is the difference between the current market value of the home and how much you owe on the mortgage. That’s one reason why a bigger down payment affects your equity–you’ll start out owning the mortgage amount minus that money down. Since the equity in your home is subject to change, it’s important to pay attention to | more...

May 26, 2022

What You Should Know About Using An Escrow Account For Your FHA Loan

By Bruce Reichstein

Are you planning to buy a home? Whether you seek an FHA mortgage or not, you may be required to use an escrow account for the loan transaction. You will need a safe place to deposit earnest money in the buying phase and you may also need escrow to pay your property taxes each year. FHA Loans Require Escrow Your participating FHA lender may require the use of an escrow account. Are you applying for an FHA 203(k) Rehabilitation Loan or an FHA One-Time Close Construction loan? Both types of mortgages require payments to contractors who are renovating or constructing your home. FHA loan funds must be stored in escrow until it’s time to use them. There is no unrestricted cash back to the borrower with these loans, so escrow | more...

Home Loans For Building On Your Own Land

May 24, 2022

Building Your Home Instead Of Buying Someone Else’s House

By Bruce Reichstein

If you want to build your home from the ground up on your own lot, you have plenty of options, starting with a choice between a construction loan with two applications, two loans, and two closing dates and a loan that only has a single application, one loan, and one closing date. The loans that require only one application and closing date are known as One-Time Close construction mortgages. They are also known as construction-to-permanent mortgages. The loans that require two of everything are simply known as construction-only loans and you must apply for the mortgage loan separately from the construction loan. What are the basic benefits of choosing a One-Time Close loan aside from the obvious? Your ability to have single loan approval and one closing date are important. | more...

May 18, 2022

Home Loans And Credit: Facts And Fiction

By Joe Wallace

Are you worried about your ability to pass a credit check for a home loan? Some borrowers may be justified in their concerns, especially after recent pandemic-related financial setbacks or interruptions in employment. Sometimes borrowers are misinformed about their chances of being approved for a mortgage–it’s never a good idea to assume you cannot qualify even if you’re concerned about past credit issues. What do you need to know to move forward? FHA Loan Credit Check Facts: FHA Mortgages Have Lower FICO Score Requirements FHA loan rules in HUD 4000.1 say that applicants with FICO scores of 580 or higher technically qualify for an FHA mortgage. But you’ll need to discuss your scores with a participating lender since lender standards may apply above and beyond the FHA minimum. FHA Loan | more...

May 16, 2022

Why Choose An FHA Mortgage?

By Joe Wallace

Why do some borrowers choose FHA mortgages when conventional loans, VA mortgages, and even USDA home loans are also options to consider? In some cases the answer is easy to understand; the FHA 3.5% down payment minimum is attractive to borrowers who worry they might not be able to qualify for a conventional loan or can’t afford a higher down payment. But FHA mortgages aren’t just for those who want a lower down payment. Some may choose an FHA home loan for their ability to be refinanced later with an FHA Streamline Refinance Loan, which typically must result in a benefit to the borrower such as a lower mortgage rate or lower monthly payments. How do FHA mortgages compare to their non-FHA counterparts? When you compare the FHA loan program | more...

May 13, 2022

Reasons To Refinance With An FHA Mortgage In 2022

By Bruce Reichstein

There are many reasons to consider refinancing a home loan with an FHA mortgage. Some aren’t as attractive in times when interest rates are moving higher, and others may require a refinance no matter what the rates are doing. Recovering from financial or natural disasters can bring a homeowner back to the lender to discuss options for saving a home through refinancing as one possible option. In the spring of 2022 when inflation and other issues contributed to rising interest rates, cash-out refinancing may not be on the table in the minds of those worried about a continued rise in rates. But some homeowners affected by the pandemic who are struggling to make their mortgage payments or struggling to keep up due to the long-term financial effects of COVID-19 on | more...

May 12, 2022

FHA Rehab Loans And Remodeling Projects

By Joe Wallace

If you are interested in an FHA 203(k) Rehabilitation Loan to buy and renovate a home or want to use the refinance version of the FHA 203(k) Rehab Loan, there are some things you should know before committing to a renovation project. That’s especially important for those who want to refinance their existing mortgage into an FHA 203(k) and use the loan funds to improve the home they already own. Why? Because it’s easy to get the wrong idea about how much value certain renovations might add to your property. For example, some might believe that adding a pool or hot tub will increase the value of their property. Never mind that FHA 203(k) Rehab loans don’t permit such luxury items, it’s the misconception that’s most important here. Why is | more...

FHA Home Loans And First Time Home Buyers

May 11, 2022

Three Things To Know About FHA Loan Choices

By Joe Wallace

If you have never used an FHA home loan before, there are some things to consider when you’re comparing your options. One of those areas involves your basic needs and goals for the home, and another involves the costs of the loan. A third is related to the choices you have when it’s time to sort out how much to pay upfront and what to consider including in the loan amount. FHA Loans: Fixed Rate Or Adjustable? When interest rates go up, it may be tempting to compare your options between fixed-rate mortgages and adjustable-rate or ARM loans. But don’t look at the rates alone; decide how long you think you may keep the home and make your decision about ARMs afterward. Why? Because if you plan to keep the | more...

FHA Construction Loan Rule Changes In 2021

May 10, 2022

FHA One-Time Close Construction Loans: Buying And Owning Land

By Bruce Reichstein

With an FHA One-Time Close construction loan, you have the ability to build a home on your own land instead of purchasing someone else’s house. There are two kinds of borrowers for these construction loans, those who already own land and those who do not. Some might wonder if they are left out of the FHA construction loan option simply because they don’t own a parcel of land yet. The good news is that FHA One-Time Close loans allow you to apply for a loan to buy the land as well as build the home. You’ll find that it may be easier to qualify for an FHA One-Time Close loan than a conventional equivalent, but keep in mind that you may have certain closing costs that aren’t applied with certain | more...

May 9, 2022

Refinancing A Mortgage Without A Credit Check

By Joe Wallace

Is there such a thing as a no-credit-check FHA loan? There are zero-down payment home loan options offered by the Department of Veterans Affairs and USDA, is there a similar type of loan for those who don’t want a credit check? When it comes to purchase loans, FHA mortgages require a credit check, employment verification, and other financial information to approve or deny the loan. You won’t find a home loan issued by a traditional lender that has no credit pull. That does not mean you cannot purchase property without undergoing a credit check. A 100% cash transaction between borrower and seller would technically not require one unless some kind of credit was needed. And depending on the state where you live, community property laws may or may not require | more...