Articles Tagged With: FHA Refinance Options

May 12, 2011

FHA Rules on Non-Occupying Co-Borrowers

In our last blog post we discussed FHA options that apply to military members who might explore FHA insured loan options when a VA loan isn’t available. Military families often face unique circumstances which affect the ability to meet some obligations as an FHA home loan applicant. For example, a military member could be sent to a war zone for an extended period of time–which could lead to worries about fulfilling FHA occupancy requirements. Such situations are usually covered under FHA rules and don’t necessarily mean problems with an FHA mortgage. FHA rules also address circumstances a borrower might find themselves in when applying for an FHA insured loan with a non-occupying co-borrower. Did you know FHA requirements state that all non-occupying co-borrowers and/or co-signers must have a principal residence | more...

May 12, 2011

FHA Loans For Military Veterans

By Joe Wallace

The Department of Veterans Affairs offers VA home loans to qualified service members as part of their VA benefits package. Why would a veteran want to explore options for an FHA home loan? It’s a very good question, and depending on the status of a military veteran, he or she may find an FHA mortgage to be a good alternative when the full benefits of a VA loan are unavailable. VA loan applicants must first apply for eligibility through the VA–the VA loan benefit is not automatic. In some cases the borrower may not have served long enough to qualify for benefits. This is true in the case of Guard and Reserve members who haven’t served for six years (unless “otherwise eligible” according to the VA). That’s just one example, | more...

May 11, 2011

Is There A Penalty For Pre-Paying On An FHA Home Loan?

By Joe Wallace

It’s common knowledge that you should read a loan contract carefully, but when applying for a mortgage loan, many first time home buyers struggle to understand some of the fine print. It’s important to ask questions about any portion of an FHA or conventional loan agreement you don’t understand. For example, some buyers don’t fully grasp the implications of the penalties for “early payment” in a mortgage loan contract. Did you know some conventional loans can charge fees for early payoff of a home loan? FHA loan regulations don

May 10, 2011

How Does Chapter 7 Bankruptcy Affect My FHA Loan Application?

By Joe Wallace

A common question for some FHA loan applicants has to do with previous bankruptcy filings and how having a bankruptcy on a credit record can affect a new application for an FHA home loan. There are two types of bankruptcy-Chapter 7 is a liquidation type bankruptcy, Chapter 13 is a reorganization process where outstanding debts are paid off over a period of up to five years. Chapter 7, where the borrower’s assets are liquidated in order to help pay off the debts owed, does not automatically mean an FHA loan applicant will be denied a mortgage loan. According to the FHA official site, “A Chapter 7 bankruptcy (liquidation) does not disqualify a borrower from obtaining an FHA mortgage if at least two years have elapsed since the date of the | more...

May 9, 2011

Can I Get an FHA Home Loan for a Second Home?

By Joe Wallace

In other blog posts we’ve written about the rules for FHA home loans, which include requirements that the property be used as a primary residence. That means an FHA borrower cannot take out a mortgage to purchase a summer home or vacation property–the rules forbid FHA loans for such “recreational use” purchases. Those rules aside, there are some instances where and FHA borrower could qualify to purchase a second home if certain conditions are met. The FHA describes such homes as “secondary residences”, stating “A secondary residence is a property the borrower occupies in addition to his or her principal residence.” These home loans are approved only when the FHA has evidence that “an undue hardship exists, meaning that affordable rental housing that meets the needs of the family is | more...

May 4, 2011

FHA Cash-Out Refinancing Facts (Part Two)

By Joe Wallace

In our previous blog post, we discussed the rules for FHA cash-out refinancing loans. The FHA allows cash-out refinancing for qualified borrowers. Those qualifications include a requirement for the existing mortgage to be current. FHA

May 4, 2011

FHA Cash Out Refinancing Facts

By Joe Wallace

House hunters who purchase a home with an FHA mortgage loan may eventually decide to refinance the home to get a better interest rate, lower payments or to take advantage of the equity built up in the home. Many borrowers are curious about FHA cash-out refinancing options–does the FHA allow a cash-out refinancing option? The answer is yes, but there are some conditions that apply. There are requirements on cash-out refinancing that may not apply to other types of refinancing loans. For example, a cash-out refinancing loan will be denied to borrowers who are delinquent on the mortgage or who have a record of delinquency within the last 12 months. Borrowers with less than six months of payment history on the current mortgage will be turned down for cash-out refinancing, | more...

April 29, 2011

FHA Loans: How Does the Bank Approve FHA Loan Applicants?

By Joe Wallace

There are many types of FHA insured loans available for single-family residences. Borrowers can apply for a traditional home loan with a down payment, fixed interest rate and a 15 or 30-year mortgage. But there are plenty of other loans which can be applied for including; Section 203h Insured Mortgage for Disaster Victims Section 255 Home Equity Conversion Mortgage (HECM) Section 203k Rehabilitation Mortgage Energy-Efficient Mortgage Program (EEM) Adjustable rate mortgages Section 248 Indian Reservations and Other Restricted Lands Title I Home Improvements Regardless of what loan product is preferred, for new purchases and many FHA refinancing options, borrowers must fill out an application giving information that includes employment and residence history, detailed accounts of outstanding debts and monthly financial obligations and much more. The FHA requires this information in | more...

April 27, 2011

FHA Loans: How Does the FHA Help?

By Joe Wallace

“How can the FHA help me buy a home?” That’s one of the most frequently asked questions about the FHA home loan program. There is plenty of information about FHA home loans, but if you’re a first-time home buyer and don’t know where to look, having that question answered may be the most important part of the decision making process when trying to choose between a conventional loan and an FHA home loan. FHA loans are different than conventional mortgages in several basic ways. To start, FHA-insured loans are more attractive to lenders because the U.S. government backs the loan. That means lower risk for the lender. Because the government insures the loan in case of default or foreclosure, applicants with past credit trouble may have an easier time getting | more...

April 11, 2011

FHA Streamline Refinancing Rule Changes In Full Effect This Week

By Bruce Reichstein

In February 2011, the FHA and HUD issued an announcement about changes to the Streamline Refinancing program. Many alterations to the program were made, some effective immediately when the guidance was issued in February, other changes were designed to be implemented no later than 60 days from the date of Mortgagee Letter 2011-11, February 14th. One of the important changes in that letter affects FHA non-credit qualifying streamline refinancing. The FHA and HUD wanted to have greater risk control over the FHA insurance fund; the FHA determined stronger rules were needed to safeguard FHA streamline loans. According to the mortgagee letter, “mortgagees must not use an appraisal to increase the insurable mortgage balance beyond the sum of the outstanding principal balance and the new Up-Front Mortgage Insurance Premium.” The new | more...