Articles Tagged With: FHA Mortgage

December 7, 2023

The 2024 Housing Market

Real estate agencies and finance blogs get into the prediction business at the end of each year, with many publishing articles comparing their expectations for the new year with what happened in the current year. 2024 is no different. One such company, Redfin, predicts that the new year could be a great time to reconsider buying a home as the housing market enters into recovery mode. The End Of The Seller’s Market? Redfin makes a prediction for 2024 many really want to hear. “Home prices will fall because supply will rise more than demand.” The lack of supply caused the seller’s market of 2022, and more housing inventory will begin leveling the playing field, so to speak, between buyers and sellers. In a seller’s market, as the name implies, the | more...

December 4, 2023

Home Loans and Your Credit Scores

By Joe Wallace

FHA mortgages (including purchase loans, One-Time Close construction loans, and FHA condo loans) have more forgiving credit score requirements for loan approval than some conventional mortgages, but you still need to work on your credit at least 12 months ahead of your home loan application for best results. But some aren’t sure what scores to aspire to. Many finance blogs have varying advice on what to do about your FICO scores if they aren’t in the good or excellent range. But what do the major credit reporting agencies like TransUnion or Equifax say about “good” FICO scores? How do the bureaus interpret the numbers? Experian’s Good FICO Scores Experian notes, “To increase your odds of approval and qualify for a lower-rate mortgage, you should aim to have a credit score | more...

November 29, 2023

FHA Loan Limits For 2024

By Joe Wallace

In the last week of November 2023, new FHA loan limits were issued for 2024. Those new limits (see below) are for forward mortgages approved under the FHA Single Family Home Loan program. Higher FHA Loan Limits In 2024 FHA loan limits increase for a large number of applicants in 2024. HUD.gov says the limits will increase for most of the country, and a HUD press release says that FHA loan limits are increasing at least in part due to increases in property values in 2023. That’s according to Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon. The changes to FHA loan limits are meant to help buyers to find affordable homes, “at a time when a lack of affordability threatens to shut well qualified borrowers out of | more...

November 21, 2023

Before You Apply For Your Home Loan

By Joe Wallace

First-time homebuyers are often encouraged to start planning and saving for an FHA loan at least 12 months ahead. And it’s good advice. Within those 12 months, you’ll want to concentrate on a few important areas. There are moves to make and moves to avoid in the 12 months before your home loan application. 12 months is just a baseline. Some prefer to take 18 months or longer to prepare for a mortgage application. Take as much time as you need for best results. Don’t Make Big Career Changes Too Close To Application Time For the purposes of this article, pay raises, promotions, or other upwardly mobile moves within the company you currently work for are not the issue. Switching to a freelance career, transitioning from full-time to contract work, or | more...

November 20, 2023

Home Loan Interest Rates In 2024: Higher or Lower?

By Joe Wallace

Financial pundits are noting that home loan interest rates are unlikely to fall as low as in July of 2020 when the rates moved below 3%. Is it smart to wait to buy a home until well into the new year? Should we expect more of the same higher rates in the new year as we saw last year? FHA Mortgage Rate Predictions For 2024 Business Insider repeats the Fannie Mae prediction for 2024 that rates may reside between 6.4% and 7.1% for 30-year fixed-rate conventional mortgages. FHA and VA mortgage rates are likely to be at or slightly below these numbers. The National Association of Realtors takes a less conservative approach, predicting rates could fall as low as 6.1% in 2024. These are predictions only, and various factors, including | more...

November 17, 2023

FHA Loan Occupancy Guidelines You Should Know

By Bruce Reichstein

Did you know that occupancy is a requirement when you buy a house with an FHA loan? FHA policy for occupancy requires at least one borrower obligated on the mortgage to take up residence in the home as the primary residence. This must happen within a “reasonable time” of loan closing, normally 60 days, unless you make other arrangements with the loan officer. FHA Loan Occupancy Rules For Single-Family Homes HUD 4000.1 is the FHA Single-Family Lender’s Handbook. In that handbook, you’ll find regulations covering occupancy as a condition of FHA loan approval. You won’t be approved for an FHA mortgage if you aren’t planning to use the home purchased with your loan as your primary address. How Will The FHA Know You Occcupy The Home? Loan officers are busy | more...

November 15, 2023

When It’s Time To Close Your FHA Mortgage

By Joe Wallace

Congratulations! You selected a home to buy with an FHA mortgage, your chosen FHA lender has approved your application, and the seller accepted your offer. Getting ready for closing is the next step in that process, and many newcomers ask what happens on Closing Day? Closing day is a huge milestone for both buyers and sellers. The seller moves out and surrenders the property per your sales agreement and the borrower accepts the keys to the home. On closing day, there is an update to the deed to the home, changed to be in the buyer’s name. You will also be expected to sign all the other paperwork needed to take possession of the home. Closing day typically happens within two months of making the deal, but much depends on | more...

November 14, 2023

How Much Should You Save For A Downpayment?

By Joe Wallace

How much should you save for a down payment on a home? It’s a common question that sounds like it should have a simple answer. The lowest down payment possible for an FHA mortgage is 3.5% of the price of the home. But how much should you aim for when setting your budget to save up for that downpayment? The short answer is no. But why? FHA Loan Down Payment Issues Consider a hypothetical that involves a home on sale that you buy with an FHA mortgage. The home sells for $150 thousand, and 3.5% of that amount is $5,250. That is not how much you’ll need to pay at closing time. You’ll also need to pay closing costs, which are separate from the down payment. Closing Costs A good rule | more...

November 13, 2023

Loan Options For Remodeling Your Home

By Joe Wallace

In the last quarter of 2023, mortgage rates and high house prices are negatively affecting the home improvement industry. That may lead to higher costs associated with remodeling your home. Bloomberg published an article in late 2023 noting that home improvement spending hit major highs during the pandemic; Lowes, Home Depot, and other brands may have earned more from these endeavors during lockdown, but the numbers may be telling a different story post-pandemic. And prices are going up. When remodeling costs rise, some borrowers only scale back their plans to the most needed repairs. But even with a less ambitious plan, funding is still needed, especially with Lowes and Home Depot prices creeping higher for raw materials and tools. Fortunately, there are FHA home loan options that can help. Home | more...

November 8, 2023

Credit Scores For Home Loan Approval

By Joe Wallace

What credit score do you need to be approved to buy a home? The answer to that question can change depending on the type of home loan you seek and the options you want. For example, FICO score requirements to be approved for a manufactured home loan may be lower than those who want to build a home from the ground up using a One-Time Close construction loan due to elevated risk to the lender. Construction loans are higher-risk transactions for a participating lender than manufactured homes. That means the FICO score requirements from your lender are likely to be different than a government-backed home loan program’s minimums. What FICO scores do you need to be approved to buy a home? FHA FICO Score Requirements FHA loan guidelines say FICO | more...