Articles Tagged With: FHA Mortgage

March 26, 2024

FHA And HUD Offer Foreclosure Avoidance Option

In late February 2024, the FHA announced a new home retention option for borrowers with FHA single-family home loans who may experience financial trouble along the way. The FHA Payment Supplement Program Is An Important Option The FHA Payment Supplement allows participating FHA lenders to temporarily alter the terms of the FHA loan to lower monthly payments without changing the home loan interest rate. This adjustment is not permanent but is designed to help borrowers avoid foreclosure during financial difficulties. FHA lenders working with borrowers in financial trouble now can lower the FHA mortgage payment by as much as 25%. That is meant as a temporary reduction designed to help those who can’t keep up with payments and have an FHA loan with an interest rate lower than current rates. | more...

March 25, 2024

Housing Market Recovery Predictions

By Joe Wallace

Q1, also known as the first quarter of the year, is ending, and market watchers are reassessing some of their earlier housing market recovery predictions. As Q1 2024 ends, some at Fannie Mae are saying yes, the rates are recovering, but they are moving more slowly than some would like. At the time of this writing home loans with 30-year fixed rates are at approximately 6.87%. That feels closer to the 7% range than some would like, but the rates do seem to be moving lower. Multiple factors contribute to the slower-than-hoped-for rate recovery, but none of them indicate that we will experience a shock return of much higher rates. Fannie Mae has gone on the record with a. revised mortgage rate outlook for 2024. The agency now says rates | more...

March 19, 2024

First-Time Home Buyers May Benefit From Proposed Tax Credit

By Joe Wallace

A new mortgage tax credit proposal from the Biden administration could make buying a home more affordable for first-time home buyers. The President’s proposal includes a credit potentially worth up to $10k per homeowner for qualifying transactions. If the plan is approved, those buying starter homes and/or first-time home buyers could get into a more affordable mortgage. Why Now? According to RedFin, 2023 was the least affordable year to try to purchase a house. In 2023, those making approximately $78,000 “would have spent 41.4% of earnings by purchasing a median-price home at $408,806, up from 38.7% in 2022” according to a report by RedFin. And many American homeowners today pay on loans with mortgage interest rates lower than those currently available for purchase or refinance. That would tend to make | more...

March 14, 2024

Is It Time To Buy A Home With An FHA Mortgage?

By Bruce Reichstein

Some borrowers are not sure if they are truly ready to buy a house with an FHA mortgage. Not in the financial sense. For this article, we do not mean “ready” in the sense that a borrower has saved a down payment, worked hard on credit, and has a budget plan that includes the new mortgage payment. In this article, being “ready” means deciding to stop renting and start owning a home. Running The Numbers Before You Shop Get a calculator ready if you need to answer the rent-versus-own question. Compare the current rental options with the cost of owning. Ask yourself, how much is your rent? What about renter’s insurance, monthly utility expenses, and other costs like parking and trash removal? How does that amount compare to the costs | more...

March 4, 2024

Home Buying Strategy In 2024

By Joe Wallace

In the first week of March 2024, mortgage rates were hovering at near the 7% range. Some financial pundits believe this could extend into April. A housing recovery is supposed to be possible in 2024, but there has been slow progress, not overnight changes. In recent weeks (at press time) we find fixed-rate mortgages have been in the mid-to-high 6% range (30-year fixed rate conventional mortgages) and while those numbers are expected to drop “sometime” in 2024, some borrowers are unable to wait and see. What are these house hunters to do when applying for a loan with a higher mortgage loan interest rate? Buy With A Plan To Refinance Some borrowers apply for loans with an eye on a refinance loan later, and some don’t. If you apply for | more...

February 28, 2024

FHA Home Loan Costs And How They Vary

By Joe Wallace

An FHA loan has several expenses including an appraisal, home inspection, and title search expenses. These costs are not standardized and may vary depending on where you buy the home. Aside from more obvious issues like FICO scores and how the lender uses them to determine your mortgage interest rate, what are some considerations to make in this area? We examine some key factors below. Location Counts One big factor in your costs for a mortgage? Where you conduct the transaction. As mentioned earlier location may play a role in the costs. And some borrowers assume that a service will cost more in a high-profile housing market. For example, a title search in California. Is this likely to cost more than one in Idaho? In some cases, the assumption isn’t | more...

February 26, 2024

FHA Loan Basics In 2024

By Joe Wallace

Are you new to FHA loans? Do you feel the list of requirements is a bit overwhelming? You are not alone. Many first-time home buyers experience these feelings as they get to know the home loan landscape. The good news is that your confusion will end the more you learn about how home loans work. Here is some clarity on some common FHA loan basics that some newcomers find confusing in the early days of mortgage planning. FHA Loan Approval Basics Looking at finance blogs, you will find a variety of FHA home loan requirement lists. Here is an example of one, published by NerdWallet. There are important nuances to understand about the list above. before you proceed. Let’s review each section of this list. To start, it is true | more...

February 20, 2024

Before You Close Your FHA Home Loan

By Bruce Reichstein

Once your FHA loan application is approved by your loan officer, is your FHA loan really “bulletproof” until closing day? Some believe that it is, but this is not true, there are many things that could wind up stopping a home loan before closing day. For example, your seller may change their mind and decide not to sell. The house might appraise for a lower amount than the seller asks for, and the borrower ultimately chooses to back out of the deal. There are too many scenarios to count. A home that is damaged or destroyed before the closing day is just one variable. While that may sound extreme, that’s a problem that happens often enough to require provisions in FHA loan regulations to guide borrowers and lenders through. Don’t | more...

February 14, 2024

First Time Home Buyers Should Know These FHA Loan Rules

By Joe Wallace

There are some FHA loan issues that are crucial to understand before you commit to a lender or a mortgage. For example, do you know what to do if the appraisal is lower than the asking price? Or how long you will pay for mortgage insurance? These are important things to know when planning and saving for your mortgage. FHA Loan Appraisal Issues If the house is not worth as much as the price tag, your participating FHA lender cannot lend more than the actual value of the property. This rule does not prevent add-ons to the loan, but the base loan amount is for the appraised value. If you want to buy a house that appraises lower than the asking price, you can’t finance the difference. You must pay | more...

February 13, 2024

FHA Loans Versus Other Government-Backed Mortgages

By Joe Wallace

There are three important government-backed mortgage loan options. They are FHA loans, VA mortgages, and USDA home loans. If you are new to these mortgage programs here are some basic facts about what to know when comparing these home loans. Basic Similarities Between FHA, VA, and USDA Home Loans How do these loans stack up to one another? These loans offer the lender federal government guarantees, reducing the risk to the bank and allowing the lender to offer lower-risk mortgages to customers with lower FICO scores or with other issues making it harder to qualify for a conventional loan. These loans also feature lower down payment requirements than some conventional lenders offer consumer benefits such as restrictions on your closing costs and what fees the lender is permitted to include. | more...