Articles Tagged With: First-time Home Buyer

February 22, 2022

FHA Home Loan Rules And Airbnb

Is it possible to buy a home with an FHA loan to use as an Airbnb-type venture? Borrowers are eligible to apply for FHA home loans for up to four-unit residences; what do FHA loan rules say about using the home as a rental space? FHA loan rules governing these situations are found in HUD 4000.1. Borrowers may feel encouraged by the notion that owner-occupied properties with up to four units can by purchased with an FHA mortgage, and even more encouraged that the rules actually do address (and permit) borrowers to rent out the unused living potions. However, renting these units out is also subject to FHA loan rules (in addition to lender requirements and state law). What does HUD 4000.1 say about using spaces in your home purchased | more...

February 17, 2022

Planning An FHA Mortgage

By Joe Wallace

When you decide to buy a home, you don’t just walk out and make an offer on a home. There is a planning and saving stage, a house hunting stage, and an application stage of the home buying process. That’s a bit of an oversimplification of how it works, but even as such it shows that there’s a lot to buying a home–the more planning you can do, the better off you will be. One important issue related to the planning stage of the home loan process involves your budget. Figuring out how much home loan you can afford isn’t just about how your finances look today. You will need to look to the future in terms of your job, your income, any raises or promotions that might affect how | more...

February 15, 2022

FHA Mortgage Insurance: What You Need To Know

By Joe Wallace

When you apply for an FHA mortgage, you are required to have mortgage insurance. This comes in the form of an FHA Up-Front Mortgage Insurance Premium which is paid at closing time in cash or financed into the FHA loan amount. You can do one or the other, but you can’t partially finance this premium. That’s the “up front” part. FHA loans require an annual premium paid in monthly installments. This is called a Mortgage Insurance Premium and is not the same as conventional Private Mortgage Insurance. That is required by conventional lenders for certain mortgages without a 20% down payment or better. Private mortgage insurance is known by the acronym PMI, and some borrowers (even some lenders) use MIP and PMI interchangeably even though they aren’t the same thing. | more...

February 14, 2022

Getting Your Credit Ready For A Mortgage

By Joe Wallace

FHA mortgages generally have more forgiving credit score requirements than some of their conventional counterparts. If you are thinking of applying for a mortgage you definitely want to start reviewing your credit far in advance of the application–that’s advice we give out here on a regular basis and is fairly “Home Loans 101” type information. Newcomers quickly learn that starting work on their credit as early as possible is the best move they can make in the planning stages of the loan. But what isn’t so entry-level advice? What some credit reporting agencies advise on managing your credit with or without a home loan to plan for. The implications of this advice are basically that credit is not a “set and forget” type of issue; for best results, you’ll want | more...

February 11, 2022

Is There A Smaller FHA Rehab Loan?

By Joe Wallace

The FHA 203(k) rehab loan is an excellent choice for borrowers who need to repair, upgrade, or renovate an existing home. But some borrowers don’t have ambitious, large-scale work to be done and a “full” 203(k) rehab loan might not be appropriate for smaller-scale work. Is there an option for borrowers who need an FHA 203(k) rehab loan but don’t need a very large sum of money to do the work? The FHA Limited 203(k) Rehab Loan The limited FHA 203(k) allows borrowers to apply for rehab loan funds, but the loans in this case have a maximum total repair cost of $35,000 and no repair cost minimum. This type of rehab loan is an excellent choice for borrowers who want to work on the home but without fully refinancing | more...

February 10, 2022

HUD Announces Fair Housing Settlement In Las Vegas Discrimination Complaint

By Bruce Reichstein

Fair housing laws are sadly necessary, even in the 21st century. While some may labor under the misguided notion that American society has evolved away from the need for the Fair Housing Act, the Department of Housing and Urban Development continue to investigate Fair Housing Act violations. One of the most recent? HUD announced in February 2022 that a conciliation agreement had been reached the agency and Las Vegas landlords accused of housing discrimination against people with disabilities. According to a HUD press release, the agreement was reached between “Las Vegas landlord, Anwar Malik, and Malik’s property manager, Ahmad Sharif-Yazdi, to resolve allegations of discrimination brought by a prospective tenant with a disability”. The alleged discrimination in this case was a refusal to rent property based on the applicant having | more...

February 7, 2022

What You Should Know About FHA Mortgage Loan Rate Lock Agreements

By Joe Wallace

What should FHA home loan applicants know about the practice of mortgage interest rate lock commitments? This is an important detail of your home loan and it’s best to know how the interest rate lock agreement works ahead of time so you know how and why this part of the mortgage loan process works. What Is An FHA Mortgage Loan Interest Rate Lock Agreement? An interest rate lock protects a borrower from the daily mortgage rate fluctuations that happen naturally due to investor behavior, or other market forces that can change rates. An interest rate lock commitment is not automatic; it must be formally agreed to in writing between the borrower and the lender. An interest rate lock commitment does exactly what it sounds like it does-the lender and borrower | more...

February 2, 2022

HUD Announces More Funding For Areas Hit By Natural Disasters

By Bruce Reichstein

The Department of Housing and Urban Development has been very busy in 2021 and 2022 responding to natural disasters and announcing the latest federal disaster assistance in areas hardest hit by storms, fires, flooding, and more. Homeowners in federally-declared disaster areas soon learn about the FHA’s foreclosure moratoriums and options for recovering damaged or destroyed homes using FHA 203(h) and FHA 203(k) Rehabilitation Loans (amongst multiple options). Now, HUD has announced further assistance for current and future disaster areas in the form of “Allocations for Community Development Block Grant Disaster Recovery” plus the start of something called CDBG-DR Consolidated Waivers and Alternative Requirements Notice.” That notice is described by the HUD press release as being “ a critical step taken by the department to open access to more than $2 | more...

January 31, 2022

FHA Loan Late Payments And Late Fees

By Bruce Reichstein

What happens if you miss your monthly deadline for FHA mortgage loan payments? Nobody serious about home loan planning goes into the process expecting to have missed or late payments down the line. After all, a missed payment can lead to serious issues with the mortgage if you aren’t proactive enough to deal with them right away. Life can and often does get in the way of our financial obligations. With that in mind, what should you know about missing an FHA home loan payment? To start, there are rules that codify in part how the lender is to proceed. These FHA loan rules for late payments are found in HUD 4000.1 A section in that volume titled “Late Charges” explains what the FHA views as a late payment on | more...

January 28, 2022

FHA Home Loans And First-Time Buyers

By Joe Wallace

Are you considering an FHA mortgage as a first-time homebuyer? There are some important things to remember that can help make your home loan journey better. Consider what follows as things to consider adding to your home loan planning checklist. Monitoring your credit is the first step. If you have not started the planning stages of your home loan yet or are in the earliest stages of that, you’re in a great place to start monitoring and working on your credit. If you are farther along in the process and have not started monitoring your credit, do so as soon as you can for best results. Saving money for your home loan expenses is an important part of the planning phase of your mortgage. You should research real estate blogs | more...