Articles Tagged With: First-time Home Buyer

Don't Make These Mistakes With Your One-Time Close Construction Loan

January 8, 2021

Monitoring Your Credit Ahead Of Your Rehab Loan Or One-Time Close Loan

Credit monitoring is important for any consumer but borrowers interested in building a home on their own lot using a One-Time Close (OTC) construction loan or even an FHA 203(k) Rehab loan should give serious thought about investing in credit monitoring as early as possible in the planning stages. This can be a big advantage for those seeking rehab or construction loans; participating FHA lenders may require higher FICO scores for construction loans and you’ll want every advantage in that department including knowing the contents of your credit report and the changes to it as they happen. FHA Rehab Loans allow borrowers to buy fixer-upper loans and have work done to bring them up to code and FHA standards; FHA One-Time Close (OTC) mortgage loans allow borrowers to build a | more...

January 6, 2021

One-Time Close Construction Loan Availability In 2021

By Joe Wallace

Here is a commonly asked question about One-Time Close construction loans; “I want to build my home instead of buying it but my lender says they won’t do a construction loan”. Or conversely, “I want to use a VA mortgage to build a home but the lender says they don’t offer VA construction loans. Can they do that?” If you are interested in building a home from the ground up instead of buying an existing property, you can use the One-Time Close construction mortgage to do so and there are a variety of options including both VA loans and FHA construction loans. People gravitate toward these mortgages because of more forgiving FICO score rules and lower down payment requirements. But not all lenders offer FHA mortgages or VA home loans; | more...

December 30, 2020

Five Facts You Need To Know About FHA Loans In 2021

By Bruce Reichstein

Are you interested in buying or building a home in the new year? Be informed about several issues that may apply to you when building or buying a new home. With a little information you can become better prepared to explore your FHA home loan options in 2021 5. FHA Loan Limits Are Higher in 2021 FHA loan limits go up again for the majority of housing markets in the USA again in 2021; higher loan limits may make the difference for some trying to decide where to purchase or build as well as for what kind of property to buy. Don’t forget that FHA loan limits are higher for multi-unit properties. Those interested in building a home using an FHA One-Time Close construction mortgage should ask their lenders how | more...

December 23, 2020

Changes To FHA Home Loan Paperwork In 2021

By Bruce Reichstein

Are you looking for a house to buy in the new year? If you are new to house hunting and the home loan process in general, you won’t notice the changes coming to FHA loan paperwork in 2021, but you’ll definitely be affected by the changes. The FHA and HUD issued a press release in late 2020 announcing the publication of a revised Form HUD-92900-A, (92900-A) HUD Addendum to Uniform Residential Loan Application (URLA). The revisions change certain consent forms, remove a requirement for new construction, and modify other aspects of the home loan process for FHA mortgages. The modifications are applied to documents considered typical for the FHA home loan process. Why are they changing? The move is part of a process dictated by something the FHA and HUD | more...

December 22, 2020

FHA Mortgage Relief Extended Into 2021

By Joe Wallace

Millions of homeowners with FHA mortgages in need of mortgage relief during the coronavirus pandemic are getting an extension on their options to avoid foreclosure. That is thanks to a recent move by the Department of Housing and Urban Development; the agency has announced an extension to coronavirus relief measures intended to help borrowers financially affected by COVID-19. FHA and HUD official sites announced this week that they have approved a two-month extension to the COVID-19 related foreclosure and eviction moratorium. The new expiration date for the moratorium is listed as February 28, 2021. There is now more time for FHA borrowers to request what the FHA calls an “initial COVID-19 forbearance” which must be obtained from the borrower’s mortgage servicer. This forbearance is meant to “defer or reduce” FHA | more...

Who should apply for a construction loan?

December 21, 2020

Build Your Dream Home With A One-Time Close Loan

By Bruce Reichstein

Do you own land you want to build a home on with a low down payment? Do you want to build a house from the ground up and purchase the land at the same time? There is a construction loan that can allow you to do both–the One-Time Close construction mortgage. These loans, also known as OTC mortgages or single-close mortgages, are offered as FHA mortgages (with a low 3.5% down payment requirement for any financially qualified borrower), USDA loans (need-based mortgages with income caps and other requirements) and VA construction loans with no down payment required in most cases. Some potential homeowners may be hesitant to commit to a construction loan–the process is unfamiliar to them, and to some it just seems a bit overwhelming. But getting started is | more...

December 18, 2020

FHA Home Loan Rules For Second Homes, Vacation Homes

By Joe Wallace

Investing in a vacation home is tempting for many. Some borrowers don’t want a vacation home but need a second home because of changes in job requirements, family size, or other factors. Do borrowers have the option of purchasing a vacation home or a second home with an FHA mortgage? FHA loan requirements for loan approval include a rule stating that the home be used as the primary residence; occupancy is a condition of loan approval for an FHA single family forward mortgage loan. You must be plan to use the house you buy with the FHA mortgage as your main address, and in cases where there’s an increase in family size or a change in job location. But a vacation property? Not permitted under the rules in HUD 4000.1 | more...

December 14, 2020

How To Prepare For A Home Loan In 2021

By Joe Wallace

How do you prepare for a home loan in the new year? There are a number of steps you can take to get ready. The first step for some is to contact the FHA and HUD at their toll-free number 1-800 CALL FHA to request a free referral to a HUD-approved, local housing counselor. This can help you to better understand the credit requirements of the home loan process, learn what areas to focus on to get your credit ready, etc. The first step for others isn’t to call for a referral, but rather to contact the three major credit reporting agencies to request copies of the borrower’s credit report. You’ll want to get very familiar with the contents of your credit report as early as possible. Look for a | more...

One Time Close Mortgage Loans: The Base Home Sales Price

December 11, 2020

One-Time Close Mortgage Loans: Which Is Right For You?

By Bruce Reichstein

A One-Time Construction loan provides a single loan for building a home from the ground up. You don’t have a construction phase loan and a mortgage loan to apply for separately when you use a One-Time Close mortgage. There are VA One-Time Close construction loans, FHA One-Time Close mortgages, and USDA versions of the same loan. Which one is right for you? USDA construction loans are need-based loans; household income limits and other requirements apply. Some borrowers will need a USDA loan while others may not qualify because the earn too much per household or because of other applicable factors. VA mortgages in general are a huge advantage–and the VA One-Time Close mortgage is no exception–because eligible and qualified borrowers are able to apply for this loan with no down | more...

December 10, 2020

Important Questions To Ask About Your Home Loan

By Joe Wallace

If you are considering a home loan, the Federal Trade Commission has some advice for you. The FTC, a government agency charged with providing consumer protection, advice, and free credit reports (among many other things), advises house hunters that there are some important questions you should be asking when it’s time to commit to a mortgage loan. Some issues the FTC warns about are not problems for those who apply for FHA home loans to buy or refinance a home. For example, the FTC advises borrowers to ask about any applicable penalties for early payoff of the mortgage loan. And don’t forget, the early payoff of your mortgage doesn’t just happen when you pay off the note before the loan term ends. It can also happen when you refinance your | more...