Articles Tagged With: FHA

August 8, 2019

Home Buying, FHA Loans, And Mortgage Trends

Is 2019 the best time to consider buying a home? Recent mortgage loan interest rate trends and the news agencies that report on them seem to indicate that conditions are very good for first-time home buyers looking to purchase a home in the remainder of the year. One indication? Headlines during the week of August 4, 2019 that included phrases like, “Lowest Rates Since November 2016”. And then there are reports by agencies that monitor house prices in the United States. Consider the First American Real House Price Index (RHPI), which tracks the prices of single-family homes and the effects of factors like changes in mortgage loan interest rates on consumer borrowing power. The May 2019 report by First American includes this quote: “Consumer house-buying power, how much one can | more...

August 7, 2019

Four Questions About FHA Home Loans

By Bruce Reichstein

FHA home loans, like any other mortgage loan transaction, can seem complicated at first. Especially for first-time home buyers who have never applied for a mortgage before. What questions should you ask your lender about this process before you fill out loan paperwork? FHA Home Loan Questions To Ask Your Lender: What Interest Rates Are Available To Me? FHA loan interest rates are determined by several factors, one of which being your credit score. Your lender will need to know your credit score or approximate credit score to give you an idea of the interest rates available to you, so make sure you bring that information to the lender before you ask. FHA Home Loan Questions: What’s The FHA Loan Limit For The Housing Market You Want To Buy Your | more...

August 6, 2019

HUD Announces Important Change To FHA Cash-Out Refinance Loan Program

By Joe Wallace

The Department of Housing and Urban Development has issued a mortgagee letter announcing a major change to the FHA Cash-Out Refinance Loan program. Effective September 1, 2019, the loan-to-value ratio for FHA cash-out loans is reduced from 85% to 80%. All FHA cash-out refi loans with FHA case numbers issued on or after 1 September 2019 will have the lower LTV. This has the effect of reducing the amount of cash back to the borrower on the transaction. The HUD press release states that the reduction is intended to protect against weaknesses in the housing market, and cash-out refinance loan defaults. The FHA has experienced an overall increase in cash-out loans as high as 250 percent according to HUD. In light of that statistic and other data, the FHA concluded | more...

August 2, 2019

5 Uses For An FHA Mortgage Loan

By Joe Wallace

There are five good uses for an FHA home loan you should know about, especially if you are a first-time home buyer with no experience in applying for mortgage loans. The right kind of loan awaits you, but first it’s important to determine what the right loan for you might be based on your financial needs and goals. 5. Buy An Existing Home With An FHA Mortgage You can use an FHA mortgage to buy existing construction houses as long as they meet FHA minimum standards and local building code, are primarily residential in nature, and you plan to occupy the property as your home. These homes can be condo units, mobile homes, town homes, multi-unit properties (as many as four living units), or manufactured homes. 4. Buy A Fixer-Upper | more...

July 31, 2019

FHA Home Loan Down Payment Rules: Cash To Close Sources

By Bruce Reichstein

FHA home loan down payment rules include requirements for the sourcing of funds used to make that down payment and/or provide cash to close the deal. Down payment funds and sources of cash to close must be properly documented by the lender to insure the cash does not come from unacceptable sources such as non-collateralized loans (payday loans, credit card cash advances, etc.) or in the form of “gift funds” that are not really gifts but have an expectation of repayment. When discussing the permitted sourcing of FHA home loan down payments or cash to close, many borrowers want to know if certain kinds of sources are acceptable to the lender. That can include proceeds from the trade-in of a manufactured home, the proceeds from the sale of real estate, | more...

July 28, 2019

What You Need To Know About Your FHA Home Loan

By Joe Wallace

What you need to know about FHA home loans as a first-time home buyer includes the terms and conditions of your loan, how loan approval works, and what it takes to qualify for an FHA mortgage. Are you ready for your first home? Keep reading and make note of any areas that need addressing in order to get as close as possible to home loan approval before you fill out the forms. FHA Home Loans Require A Down Payment, But It’s A Low Downpayment FHA mortgage loans require a minimum 3.5% down payment for all new purchase transactions, construction loans, and rehab loans that are not applied for as disaster relief rehab loans (the FHA 203h loan). You may be required to pay five percent down or more on some | more...

July 26, 2019

Qualifying For An FHA Home Loan With Disability Benefits

By Joe Wallace

FHA home loan rules permit the use of disability benefits to financially qualify for the loan. All income used in the lender’s debt ratio calculations must be verifiable, which means it must be a stable source of income and is likely to continue. Some borrowers worry that their disability income won’t be counted for the purposes of loan approval, but if that income meets FHA standards, there shouldn’t be any problem. Those standards are found in HUD 4000.1 and start with a basic definition: “Disability Benefits are benefits received from the Social Security Administration (SSA), Department of Veterans Affairs (VA), other public agencies, or a private disability insurance provider. “ These benefits must continue for at least three years into the mortgage to be counted as verifiable income. The lender | more...

July 25, 2019

Get Ready To Buy A Home With An FHA Mortgage

By Joe Wallace

Are you ready to buy a home? If you aren’t sure, there are some ways to know what’s left to be done before actually filling out the loan paperwork. Buying a home with an FHA loan is easier with some advance preparation and planning. Set A New Budget If you haven’t made a new budget that includes a potential mortgage payment, you should look into those numbers before you apply. You need to know how much your new house payment will affect your existing budget, and don’t forget to include extra funds for maintenance and upkeep of the home. You may need to factor in the cost of minor replacement needs, and you will also need to consider the initial outlay of cash that may be required (apart from the | more...

July 24, 2019

HUD Announces Fair Housing Agreement In California Discrimination Case

By Bruce Reichstein

The Department of Housing and Urban Development has announced a concillaition agreement in a California Fair Housing discrimination case. Recently, HUD approved a $10,000 Conciliation Agreement between a California fair housing group and “the agents and mortgage company for Boardwalk Townhomes in Corona, California. This agreement settles allegations that Boardwalk Townhomes discriminated against African American home seekers” according to a HUD press release. Federal Fair Housing Act laws forbid those in the housing industry from offering different terms or conditions on the sale or rental of a dwelling based on race, color, national origin, religion, sex, familial status, or disability. Those who have been discriminated against in such a fashion should report violations to the Department of Housing and Urban Development. “A person’s race should never be a factor in | more...

July 22, 2019

FHA Home Loan Rules About Borrower Debt

By Joe Wallace

Do you know what your lender is required to do when you fill out an FHA mortgage loan application? Part of the lender’s job is to make sure that the loan applicant can realistically afford the new home loan, and making that determination means reviewing your current debt. HUD 4000.1, the FHA Lender’s Handbook for single family mortgages, has instructions for the lender in this area. It begins stating the lender’s responsibilities: “The Mortgagee must determine the Borrower’s monthly liabilities by reviewing all debts listed on the credit report, Uniform Residential Loan Application (URLA), and required documentation.” How is that accomplished? “All applicable monthly liabilities must be included in the qualifying ratio. ” Your lender will calculate your debt ratio using one method that includes only your current debt, and | more...