Articles Tagged With: Monthly Payment

When Is An FHA Loan Better Than A Conventional Loan?

January 21, 2016

FHA HECM Loan Facts And Questions

In our last blog post we discussed some of the basics about the FHA reverse mortgage loan program known as the Home Equity Conversion Mortgage. Here are some commonly asked questions about the program and the answers you should know: What Are The Property Requirements For An FHA Reverse Mortgage? According to the FHA official site, properties eligible for an FHA reverse mortgage must meet all FHA property standards and flood requirements. The eligible property types are: –Single family home or 2-4 unit home with one unit occupied by the borrower –HUD-approved condominium project –Manufactured home that meets FHA requirements Are Manufactured Homes Eligible For FHA Reverse Mortgages? As mentioned above, FHA loan rules do technically permit HECM loans for mobile homes. However the participating lender may or may not | more...

January 14, 2016

FHA HECM Loan Facts

By Joe Wallace

The FHA single-family loan program includes reverse mortgages–a loan program where a borrower can apply for a loan that requires no monthly payments, offers cash back to the borrower, and is based on the value and equity in the home. If you are looking for a reverse mortgage, the FHA program might be just what you need. Here are some basic facts about the FHA reverse mortgage loan option: FACT: FHA reverse mortgages are known as Home Equity Conversion Mortgages or HECM for short. These two terms refer to the same thing when it comes to FHA reverse mortgages. FACT: FHA HECM loans are for borrowers aged 62 or older who either own their home outright or are very close to doing so. HECM loans are declared due when the | more...

December 18, 2015

FHA Loans And Credit Issues: Late Mortgage Payments

By Joe Wallace

In previous blog posts, we’ve discussed the importance of coming to the FHA loan application process with at least 12 months of on-time payments on your credit history. This isn’t just a good idea–it’s critical to your chances for loan approval. Why is this so important? There are two major factors at work when it comes to on-time payments, your lender’s review of your payment history, and especially how your mortgage or housing payments factor into that equation. FHA loan rules in HUD 4000.1 instruct the lender in quite specific ways on how to proceed when reviewing a borrower’s housing payment history. To begin HUD 4000.1 includes a definition for the lender: “Housing Obligation/Mortgage Payment refers to the monthly payment due for rental or Properties owned. A Mortgage Payment is | more...

December 11, 2015

FHA Announces New Loan Limits For 2016

By Joe Wallace

An FHA press release announces 2016 FHA mortgage loan guaranty limits for mortgage loans with FHA loan case numbers assigned on or after January 1, 2016. Housing market changes in 2015 brought increases in the maximum loan guaranty limit in many counties–188 areas will see new, higher limits according to the press release. According to the FHA official site, “Each year, FHA recalculates its loan limits based on 115 % of the median house price in the area. For counties, or equivalent, located in Metropolitan Statistical Areas (MSAs) the limit for all areas in the MSA is calculated based on the highest cost county.” The press release says there has been no alteration to the FHA national loan limit ceiling which, according to the press release, “remains at $625,500”. The | more...

December 2, 2015

FHA Refinancing: When Is A Credit Check/Appraisal Required?

By Joe Wallace

Are you considering refinancing your dream home? Are you looking for cash out, lower payments, or a lower interest rate? Your financial needs and goals will dictate the type of FHA refinance loan you should apply for. Knowing which type of loan you need is an important part of the refinance preparation process. Borrowers who have existing conventional, VA, or other non-FHA home loans can refinance into an FHA mortgage loan using an FHA cash-out or non-cash out option. This type of refinancing requires both a new appraisal and a new credit check. To get cash out on such a loan, you’ll need to have enough money left over in the new loan after paying off the old mortgage plus any fees and expenses associated with the loan. Borrowers who | more...

Can I buy a manufactured home with an FHA loan?

November 24, 2015

Get Ready For Your FHA Cash Out Refinance Loan

By Joe Wallace

When you buy a home with a conventional, FHA, or other type of home loan product, one day you may wish to refinance to take advantage of the equity you’ve built up in the home. An FHA cash-out refinance loan can help you do that. With a little planning you can make the most of your refinance experience. The first step is to figure out how much time you need to prepare for the loan. There are closing costs, and a new credit application and appraisal will be required. Saving money for the appraisal is a good idea, and if you wish to purchase discount points on your cash out loan you can pay for them up front with reduced stress on your monthly budget if you take enough time | more...

October 27, 2015

FHA Mortgage Loans: Late Charges

By Bruce Reichstein

What happens if a borrower misses the deadline for his or her FHA mortgage loan payments? While it’s true that no borrower goes into a home loan planning to have missed or late payments, knowing what happens when the payment is late or missed can be a big help–taking the mystery out of these issues is important, especially for new borrowers. FHA loan rules for late payments are found in HUD 4000.1 Part Three Section A. There, you’ll find a section titled “Late Charges” which begins by defining what the FHA views as a late payment: “Late Charges are charges assessed if a Mortgage Payment is received more than 15 Daysafter the due date.” Furthermore, FHA loan rules in this section state, “The Mortgagee may consider a Borrowers payment late | more...

October 27, 2015

FHA HECM Loans And Mandatory Counseling

By Joe Wallace

FHA HECM loans–home equity conversion mortgages, sometimes known as “reverse mortgages”–come with a requirement for all borrowers to be obligated on the FHA HECM to go through HECM loan counseling. This is not a requirement for other types of FHA mortgages, which leads some to wonder why FHA HECMs have this feature. Why do the borrowers have to complete FHA required counseling sessions as a condition of the loan? There are many reasons. Since HECM loans feature no monthly payments, cash back to the borrower, and specific requirements for that cash back, counseling is necessary for the applicants to know exactly what they can and cannot get with their HECM loans. This FHA loan program has changed a great deal in the last two years, and the terms and | more...

October 2, 2015

FHA Loan Rules In HUD 4000.1: Deferred Liabilities And Student Loans

By Joe Wallace

We recently got a reader question in the comments section about FHA loan rules covering deferred payments on student loans. In the past we’ve reported that FHA loan rules state certain types of student loan deferments (as explained in the old HUD 4155.1) did not have to be counted in the borrower’s debt-to-income ratio. HUD 4000.1 is the new FHA Single Family Home Loan policy handbook and has plenty of updated information, modifications to rules, and restatements of current policy and supersedes HUD 4155.1. Here’s the reader’s questions about student loans: “I was told by my realtor recently, that my student loan debt, although its deferred for three more years under teacher forgiveness, that the lender she is working with will have to count student loan debt in my DTI, | more...

September 30, 2015

FHA Loans For Rental Properties?

By Joe Wallace

A reader asked us a question recently about purchasing rental property with an FHA mortgage: “I’m considering cosigning on a rental property for my son so he can move in with friends. He has no credit established yet. My husband and i are also in the process of looking to move. How will cosigning affect us if we want to buy in the next 2-6 months and go with an FHA loan?” Is the reader question referring to a situation where the parent wishes to co-borrow with the child to purchase a residence for the child to occupy? Or does it refer to co-signing on a lease to help the child, with the parents later applying for an FHA loan for themselves? In the case of an FHA borrower who | more...