Articles Tagged With: HUD

December 28, 2010

FHA Reverse Mortgage Options

FHA HECM loans or reverse mortgages are designed for borrowers age 62 and older. These mortgages are designed to let qualified applicants take out a loan against the equity in the home--loans that can be used for living expenses, home improvements, even the purchase of a primary residence if the borrower is willing to pay (in cash) the difference between the FHA HECM loan amount and the sales price and closing costs. According to the FHA, HECM loans differ from typical home loans or second mortgages because, "no repayment is required until the borrower(s) no longer use the home as their principal residence or fail to meet the obligations of the mortgage."

December 28, 2010

FHA Home Loan Fees

By Joe Wallace

Every home loan comes with associated fees, whether it's an FHA mortgage or conventional home loan. Knowing the fees up front can help house hunters budget for the ones they must pay up front and understand which ones can be rolled into the amount of the loan when permitted by FHA regulations. FHA loan fees include the loan origination fee, which includes the administrative cost of doing business with your chosen lender. There are also title search and examination fees and legal fees which must be paid.

December 23, 2010

FHA Mortgages and Non-Occupying Co-Borrowers

By Joe Wallace

First time FHA loan applicants soon learn the world of FHA loans is aimed at helping people who want to become homeowners; a fairly obvious assumption to make when dealing with a government agency with a mission statement that includes helping people achieve their dream of home ownership. But private home owners aren't the only ones interested in buying and selling real estate; that's one of the reasons for the strict FHA requirements that single-family FHA home loan borrowers certify the property is to be used as the primary residence. FHA mortgage loan rules forbid using FHA home loans to buy real estate for investment purposes.

December 22, 2010

How Much Does an FHA Appraisal Cost?

By Joe Wallace

Part of the FHA home loan process is establishing the reasonable value of the home for sale. The reasonable value is not necessarily the asking price, but rather the estimated market value of the property based on the work of a licensed, FHA-approved appraiser. The appraisal is a crucial part of the FHA loan process; without it, the loan can't move forward. The FHA will not insure or guaranty a loan amount for more than the reasonable market value of the property (with approved extra costs such as energy-efficient upgrades and other items approved by the FHA to be included in the FHA loan amount).

December 21, 2010

Do FHA Loans Have Minimum and Maximum Age Requirements?

By Joe Wallace

There are many myths to dispel about FHA home loans. The most popular ones include the notion that the FHA actually lends money (it doesn't) and the idea that if you earn "too much" money you can't apply for an FHA mortgage (you can). There are also myths about age. According to FHA rules, there is no maximum age limit for FHA borrowers. Anyone who qualifies for an FHA home loan is eligible to apply regardless of how old they are. All income, credit, and occupancy rules apply to FHA borrowers regardless of age, but there is no "cut off" point where the government would refuse to guaranty a loan simply because of how old the applicant may be.

December 21, 2010

What is an FHA Growing Equity Mortgage?

By Joe Wallace

For every new home owner, there is a different set of needs. FHA mortgages are designed to serve a range of preferences. Some people apply for an FHA home loan looking simply for low monthly payments. Others purchase homes looking for lower interest rates so they can save money over the lifetime of the FHA loan. Still others want to purchase homes with shorter commitment times. For those who want shorter mortgage terms, the FHA Growing Equity Mortgage or GEM is an option worth looking into. GEMs are basically Graduated Payment Mortgages; they let the borrower pay off the principal faster while shortening the mortgage term by increasing the payments over time.

December 17, 2010

What is the HUD-1 Settlement Statement?

By Joe Wallace

he HUD-1 Settlement Statement is a document used to show buyers and sellers the full financial details of the transaction for the purpose to documenting who has paid or agreed to pay what costs, adjustments, etc. It also shows how much money the buyer needs to bring to the transaction up front in order to close the deal. The first page of the Settlement Statement provides the buyer with a list of all costs and related figures for both buyer and and seller. The area called Section J is for the FHA borrower while Section K lists the seller's part of the deal. Buyers are required to get Section J but they may not necessarily be furnished a copy of Section K, the seller's portion.

December 16, 2010

HUD Investigates 22 Banks for Alleged FHA Loan Discrimination

By Joe Wallace

One of the things a first time home buyer notices about the FHA loan process is the abundance of rules and regulations designed to protect the borrower from unscrupulous lending practices. Some of those rules are to prevent a buyer from getting cheated or enter into a predatory lending arrangement. But other FHA requirements are in place to make a level playing field for all applicants; all qualified FHA loan applicants must have access to the same industry-standard terms, conditions and quality.

December 15, 2010

What Is the FHA Up Front Mortgage Premium?

By Joe Wallace

FHA borrowers who decide to refinance their home using the FHA Streamline program must make another UFMIP payment, but the good news is that any money in the original Up Front Mortgage Insurance account may be transferred to the new account. Some buyers who purchased homes with an FHA home loan after September 1, 1983 may be entitled to a refund or partial refund of FHA mortgage insurance money, See the FHA for more information.

December 14, 2010

FHA Closing Costs and Loan Origination Fees

By Joe Wallace

n our last blog post we discussed FHA loans and interest rates. Contrary to the impression some first-time home buyers may have, the FHA and HUD do not set or regulate interest rates on FHA mortgages. The FHA doesn't "regulate" closing costs but does have requirements which state lenders may charge what is "reasonable and customary". FHA requirements on closing costs also include the following from the FHA official site" "Aggregate closing costs charged to a borrower may not violate the FHA tiered pricing rules which prohibit a lender from charging higher prices for low balance loans than the lender charges for higher balance loans."