Articles Tagged With: First-time Home Buyer

May 9, 2024

When You Are Ready To Apply For Your FHA Mortgage

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...

May 1, 2024

What To Know About FHA Loan Application Documents

By Bruce Reichstein

There is documentation required to process your home loan application and knowing what you need to submit in advance will speed up your home loan application journey. Do you know what your home loan or refinance loan transaction requires of you? The lender requires tax documents, information about the sources of your down payment, access to your credit reports, and more. But there are rules about who provides these documents, and you’ll need to be aware of them when gathering your paperwork. FHA Loan Rules On Documentation Some of the information your lender needs comes from you personally. This includes your photo identification and proof of legal residence in the USA (which may be required where applicable). FHA loan rules say you do not have to be a citizen to | more...

April 29, 2024

Before Your Home Loan Gets Approved

By Joe Wallace

New house hunters looking for a home to buy with an FHA mortgage soon learn about the phases in the process of finding, making an offer, and moving into a new home. There is an initial phase for planning and saving and a house-hunting phase, where you start looking for a house to make an offer on. We examine some key parts of the process below. Pre-Approval / Pre-Qualifying For An FHA Home Loan When you look at houses with an eye on making an offer, it helps to get prequalified for a loan to learn how much you might be approved for when you make the offer. Prequalification is a process resulting in a rough estimate of how much you could qualify to borrow. It is not the same | more...

April 24, 2024

Should You Buy A Home Now?

By Joe Wallace

U.S. News and World Report published an article in Spring 2024 with data from a U.S. News survey of American mortgage trends this year. The information from that report indicates that many potential real estate buyers may be delaying their commitments to see what happens with mortgage loan interest rates. In that survey, 67% of house hunters who responded say they are on a wait-and-see basis with respect to home loan interest rates. These house hunters hope to wait out the rates before buying a house this year. Also according to the survey, approximately one quarter of the respondents “want to see them below 5% before buying, which isn’t expected to happen in 2024 or even 2025. About half (49%) are willing to wait for more than six months for | more...

April 23, 2024

What You Need To Know About FHA Loan Closing Costs

By Bruce Reichstein

What must you know about FHA home loans, cash to close, and your obligations at closing time? If you are a first-time homebuyer, it’s easy to get confused (initially) about the difference between your down payment money, closing cost funds, and other expenses like the home inspection. Some of the early confusion comes from the fact that some do not understand the FHA philosophy about the down payment and the other expenses associated with closing day. That money is not lumped into your downpayment requirement when you pay closing costs. In other words, if you pay X amount of money at closing time for things like the FHA Up-Front Mortgage Insurance Premium and other expenses, that money is NOT considered part of your FHA loan downpayment. HUD 4000.1, the FHA | more...

April 22, 2024

Mortgage Rate Trends In The Second Quarter 2024

By Joe Wallace

At the time this article was written, 30-year fixed-rate FHA mortgage rates were listed in the low 7% range. Some expected that position to be far more prevalent in the past than it actually is as we review mortgage rates in the second quarter of the year. Is there a chance of recovery in the coming months? Conditions aren’t clear, but the Fed’s future actions could determine the direction of things. Recovery Prospects For The Housing Market May Be Tied To Future Fed Actions (Again) Matthew Graham of Mortgage News Daily reports, “While (Fed Chair) Powell and the Fed repeat that the rate path depends on economic data, it’s no surprise to see recent comments acknowledging a surprising amount of strength in the recent data.” Graham also says, “Stronger data | more...

April 18, 2024

Mortgage Borrowers At Risk In 2024?

By Joe Wallace

Are FHA mortgages and other types of mortgages riskier in 2024? The answer may be YES thanks to a currently elevated potential for mortgage fraud initiated by scam artists. Fraud prevention company Funding Shield reports high fraud vulnerability in roughly half of all “portfolio loans,” including residential mortgages, in the first three months of 2024. According to HousingWire.com, such problems seem to arise due to a “lack of appropriate controls” related to closing procedures. In some cases, these problems are not related to a residential real estate borrower or seller, but for one specific aspect of the mortgage process, FHA mortgage loan applicants may be at an elevated risk. Wire Fraud Scams And Your Mortgage The Funding Shield report includes data about closing cost-related wire fraud vulnerabilities. Those potential problems | more...

April 3, 2024

First-Time Home Buyer Tools You Should Know

By Joe Wallace

Are you buying a home for the first time? Are you buying a home after a long gap in home ownership? There are some consumer tools you should know about that can help you get closer to owning your dream home. Not all these tools are for the loan planning and saving stages. For example, when house hunting, if you find a home you want, do you know how much your monthly mortgage payment will be? You can use online mortgage calculators to help. But that’s a common mortgage tool–what about other options? Credit Issues Borrowers who need to work on their credit might be surprised to learn that they can repair their own credit AND get advice on improving credit on a do-it-yourself basis. Do you know the three | more...

April 1, 2024

Home Loans In 2024: The First Quarter

By Joe Wallace

The first quarter of 2024 was a positive one for some house hunters. But many are wondering if rates will get closer to the mid to lower 6% range soon and whether to wait until that happens to start planning for a new FHA mortgage. A CNBC news report on mortgages published in the first quarter says there was higher demand in first three months of 2024. Higher demand potentially means higher sale prices, but not always. This year, it’s likely that is one of many contributing factors to the current rate environment. Did the supply rise to meet demand in Q1? CNBC notes that inventory went up nearly 6% overall. That meant as many as a million houses were for sale at the end of February. Home Sales Up | more...