Articles Tagged With: First-time Home Buyer

June 12, 2024

FHA Appraisals: What To Remember

The FHA appraisal is one of the most important pre-closing day aspects of your home loan process. Without an appraisal, your lender can’t know if the home meets minimum basic standards for safety, remaining economic life, and serviceability. The lender also can’t make a realistic judgment about the fair market value of the home without an appraisal. What should you know about this process and how it affects you? FHA appraisals are a tool for the lender and not a tool for the borrower. You may be privy to the results of the appraisal, but that does not mean it was designed to help you as a borrower. It is not meant to tell the borrower anything actionable, especially where the condition of the home is concerned. That is the | more...

June 11, 2024

What To Ask When Buying A Home With An FHA Loan

By Joe Wallace

If you want an FHA loan to buy a home, it is always a good idea to compare lenders, real estate agents, and other service providers who serve the housing industry. When comparing, there are important questions to ask each provider to learn more about whether they are right for you. How Long Have You Worked In This Field? The answer will vary depending on the inspector, real estate agent, or lender and when doing so but there are trade-offs to consider for newcomers to the business. A more experienced lender or real estate agent likely understands more complex issues related to your home loan and can deal with them more efficiently than a “noob.” That said, newcomers aren’t always the liability you might assume they are, especially if they | more...

Getting An FHA Mortgage After Bankruptcy

June 5, 2024

Buying Older Real Estate With An FHA Mortgage

By Joe Wallace

Interested in buying an old house? A fixer-upper? Does the house you fell in love with need extensive repairs to make it worth owning? FHA loans include options for older homes and fixer-uppers. We cover some key points below. FHA Loan Options Are More Flexible Than You Might Think There’s no single FHA mortgage option. You can’t use one loan to buy any property type that is allowed. There are just too many different options and needs that must be taken into account in the housing market. Want to build a home from the ground up? There’s an One-Time Close FHA construction loan for that. Want to buy an old property and rework it into a newly renovated home? There are FHA loan options for that choice, too. If you find | more...

June 3, 2024

FHA Home Loan Credit Score Requirements: FICO Scores And More

By Joe Wallace

Many borrowers worry about their credit scores ahead of an application for an FHA home loan, and it’s hard for some to gauge whether they have sufficient credit to get a loan approved. FHA loans have more forgiving credit requirements, and borrowers should not assume they do not qualify for a home loan without discussing their circumstances with a participating lender. When is a low credit score too low? FHA home loan rules specify that the lender must ensure a 500 FICO score (the very minimum) to qualify for an FHA mortgage, but your credit score numbers don’t tell the whole story. Lender Requirements For Home Loan Approval Vary You may read that FHA loan rule minimums for FICO scores do not always reflect the participating lender’s credit score requirements–this | more...

May 28, 2024

Before Your First FHA Mortgage Payment

By Joe Wallace

Do you know what to expect after your FHA mortgage closes? Borrowers should know a few common things about what to expect after closing day, such what to expect from payments and mortgage statements. What To Know About FHA Loan Mortgage Statements Not all home loans have the same terms and conditions, so be sure to review your contract carefully to learn how your statement will be delivered each month or if the loan stipulates you have a payment book to rely on instead. Assuming your mortgage payment notification automatically comes to you electronically or by U.S. Mail is not safe–make a point to learn what your contract says. Do you need an alternative option? Ask early. Your mortgage statement should have information about what you owe. This includes any | more...

May 20, 2024

Down Payment Issues In Today’s Housing Market

By Joe Wallace

In the days before January 1, 2024, finance pundits and mortgage blogs (at least in some circles) were expecting a housing recovery to be underway by now. But as of May 2024, those commentators are revising their opinions about when and how a market recovery could happen. Consider what Yahoo!Finance published on May 19, 2024. “At the beginning of the year, housing experts and homebuyers looked forward to better buying conditions — interest rates were poised to drop, a shift expected to free up inventory and cool surging home prices.” That, according to Yahoo!Finance, has “mostly changed.” The housing market is headed into summer 2024 without the hoped-for mortgage rate cuts. There are also problems with housing inventory in some markets. Even the National Association of Realtors has complained in | more...

May 14, 2024

Why Get Pre-Approved For An FHA Home Loan?

By Bruce Reichstein

Why get pre-approved for an FHA mortgage? This is a question some first-time home buyers ask, and the answers can make a big difference in how you approach your home loan. FHA Home Loan Pre-Approval Does Not Commit You To A Mortgage When you fill out the forms to be pre-approved for a home loan, you are not committing to the transaction in the sense that you would be financially obligated to buy. The borrower is not legally committed to a purchase when getting pre-approved. Home loan pre-approval actually helps you be taken seriously as a buyer when you do find a home you’re ready to commit to. The buyer takes a pre-approved borrower more seriously and you may find that a pre-approval letter (depending on the housing market) is | more...

May 13, 2024

FHA Appraisal Guidelines You Should Know

By Joe Wallace

The FHA and HUD have reformed parts of the FHA single-family home loan appraisal guidelines found in HUD 4000.1. These changes are meant to improve the process for reconsidering an FHA appraisal in cases where there may be defects or violations of FHA policy. Can I Get A Revised FHA Appraisal? Was your FHA appraisal is flawed? In such cases the borrower or lender may be allowed to request a Recosideration of Value (ROV). An ROV is essentially a review of the appraisal to correct report deficiencies or problems with HUD regulatory compliance. You should not expect to be allowed a second appraisal only because the value comes in lower than anticipated. What HUD Says About ROVs The HUD official site says, “A Reconsideration of Value (ROV) refers to a | more...

May 9, 2024

When You Are Ready To Apply For Your FHA Mortgage

By Joe Wallace

When a borrower has the down payment funds and feels ready to commit to the house-hunting journey, applying to be pre-approved or pre-qualified for an FHA mortgage is the next logical step. But there are a few things to review before you begin. Gather Your Documents And Know Your Financials Applying for a loan includes bringing financial data to the bargaining table. You must gather two years of tax returns, you should know specifics about annual gross and net income, and be ready to give the lender information about outgoing debt, your current credit scores, and any other non-employment sources of income you want counted for loan approval purposes. Your lender requires this information to begin. Some situations require more information than others. For example, small business owners may be | more...

May 8, 2024

FHA Appraisal Rules Change To Help Borrowers

By Joe Wallace

The FHA and HUD have revised appraisal rules for FHA single-family loans. Among the changes, FHA lenders must now provide home buyers with “clarified guidelines to contest an appraisal or request a reconsideration of value (ROV.) “root out racial, ethnic, or national origin bias in residential property valuations” on homes purchased with FHA mortgages.” HUD Publishes Its New Appraisal Guidelines A HUD mortgagee letter published in May 2024 says there are important changes in HUD’s Nondiscrimination Policy, Appraiser Conduct, and other Federal Housing Administration (FHA) Roster Appraiser requirements. The goal is to create more equity in the appraisal process and “ensure appraisals for insured Mortgages are performed in a competent, independent, impartial, and objective manner” and that appraisers conform to what HUD calls the “Competency Rule.” Changes To FHA Appraisal | more...