Articles Tagged With: First-time Home Buyer

June 13, 2022

What To Know About Renovating Your Home With An FHA Loan

FHA home loans for renovation include the FHA 203(k) Rehabilitation loan and refinance loan options. There are also FHA Energy Efficient Mortgages or FHA EEMs that allow energy-saving upgrades and improvements to the property. EEMS are add-ons allowed for most FHA home loans, not a separate loan program, and adding an EEM potentially raises your monthly mortgage payment. If you need to apply for an FHA home loan to renovate, the first thing you need to know is that on paper, FHA loan rules say you may be allowed to be your own builder or contractor. However, lender standards will apply and you may find that your FHA lender does not permit this. You’ll need to ask directly as early in the process as possible. FHA loan rules say that | more...

June 6, 2022

FHA ARM Loan Options To Consider

By Joe Wallace

An ARM loan, also known as an adjustable-rate mortgage, allows you to apply for a loan with an initial rate that will increase after the introductory period is over. The lower initial rate is a benefit for some borrowers, but it pays to have a plan on how to handle this type of loan in advance–do you really plan to pay on an ARM for the full term of the mortgage? Or do you want to sell or refinance instead? FHA loan options include ARM loans which may have a one-year intro rate, but you could apply for a three-year, five-year, seven-year, or even 10-year ARM loan. That means that the introductory rate won’t change for that initial period (three years up to 10 years) and then the loan is | 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 20, 2022

What You Need To Know About FHA Home Loan Interest Rates

By Joe Wallace

What should you know about home loan interest rates? As the home loan market begins to see higher rates than in the last few years, you’ll want to understand some of the aspects of interest rates and how they affect the cost of your mortgage long-term. There are many home loan blogs that discuss the fluctuations of mortgage rates and talk about mortgage rates as they move higher and lower. Some lenders and bloggers discuss mortgage rates as though the ones mentioned apply to anyone who wants a home loan. But is this true? The rates you see advertised on the internet are usually posted as “best execution” interest rates which means that “ideal conditions” are assumed, or that the rates are applied assuming certain conditions including certain FICO score | 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...

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...

May 5, 2022

FHA Home Loan Planning For First-Time Home Buyers

By Bruce Reichstein

If you’re considering an FHA home loan to purchase your first home, there are some issues you might not think about right away when planning and saving for your loan. Anticipating some of these issues can help you make smarter choices about your home, the home loan, and the features of the mortgage. Think Like A Lender That is advice commonly reserved for the credit check, and it’s good advice. Learning to think like a loan officer can help you better determine whether you are truly ready to apply for the loan. For this article, “think like a lender” also extends to things like the type of home you want to buy. What does this mean? When a home is appraised, your lender’s review of the appraisal report will include | more...

May 4, 2022

FHA Appraisals: Facts You Should Know

By Joe Wallace

Some FHA borrowers wonder about how the appraisal works. It’s a process that can seem a bit mysterious until you understand the hows and whys. What do you need to know about FHA appraisals to help you make the most informed choices about a particular home? FHA Appraisal Facts: The Appraisal Is A Tool For Your Lender, Not For You Appraisals help the lender make sure the home meets the bare minimum standard for safety and habitability. It also helps the participating FHA lender establish the fair market value of the home. It is not a tool for the borrower in any way except to provide the dollar amount for the market value. FHA Appraisal Facts: Standards Vary What applies in one housing market may not apply in another. By | more...