Articles Tagged With: Property Taxes

March 22, 2016

How Much Can I Borrow With An FHA Mortgage Loan?

One of the most common questions about FHA loans is, “How much can I borrow?” The answer to that question is a lot easier to get by using an online mortgage calculator to factor in the length or term of the loan, interest rate (estimated), estimated property taxes and other details. Some of the information you need to calculate how much you can borrow depends on circumstances. The interest rate, for example, is determined in part by what rates are on offer currently based on market conditions and other factors but also by your credit history and FICO scores. The better your FICO scores are, the better the interest rates. The borrower and the lender negotiate interest rates on FHA mortgages, they are not set or regulated by the FHA | more...

February 8, 2016

FHA Loan Mortgage Calculators: Three Types

By Joe Wallace

If you are in the planning stages of an FHA mortgage loan, one of the most important things you can do once you’ve checked your credit report and FICO scores is to examine your budget now and begin making plans to budget for the monthly mortgage payment you’ll be making once the loan is closed. There are mortgage calculators online that can help you do this–some help you calculate your mortgage with taxes and insurance, others help you to determine how much loan you can afford, and still others help you figure out how much you can borrow with your FHA mortgage. How Much Can You Afford To Borrow? One very helpful FHA loan calculator helps you determine the reasonable loan amount you can borrow. You’ll need to come to | more...

February 5, 2016

Why Use An FHA Loan Mortgage Calculator?

By Joe Wallace

When you are planning your home loan, there are many aspects to consider. The selling price of the home is only one of those aspect; borrowers will need to save money for closing costs, a home inspection, and make a monthly budget for the mortgage amount, plus taxes and insurance. Some of the planning phase of your FHA mortgage involve things like requesting copies of your credit reports–things with concrete numbers such as FICO scores and payment amounts. But when it comes to figuring out your mortgage payment, arriving at the actual number can be a bit tricky. That’s one reason why it’s a good idea to use an FHA mortgage calculator to help you arrive at a more accurate dollar amount for your monthly mortgage payment (projected, of course). | more...

January 19, 2016

FHA Loan Questions: Tax Service Fees

By Joe Wallace

A reader got in touch with us recently to ask a question about the allowable fees and expenses associated with FHA new purchase home loans (also known as “forward mortgages”). The gist of the question–can an FHA loan applicant be charged a tax service fee as part of closing costs or other loan-related fees and expenses? The answer to this question and others like it can be found in HUD 4000.1, in the portion of the rule book titled Part III Servicing And Loss Mitigation. This section includes a list of prohibited fees and expenses–costs that cannot be charged to the borrower. That list includes the following information: “The Mortgagee must not charge the Borrower for the following services: –costs of telephone calls, telegrams, personal visits with the Borrower, certified | more...

When Is An FHA Loan Better Than A Conventional Loan?

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 15, 2015

FHA Loans, Early Payoff, And Prohibited Fees: HUD 4000.1

By Joe Wallace

With the publication of HUD 4000.1, existing FHA loan rules have been restated, updated, modified, or reprinted. In some cases nothing has changed, in other cases there have been major or minor alterations to the language, terms or conditions of these FHA loan rules. We’re examining many sections of the new rulebook and discussing common issues that may be affected by those changes, even if in some cases the rules haven’t changed. Knowing what’s in HUD 4000.1 as opposed to the old FHA single family home loan rules found in HUD 4155.1 and 4155.2 is important as HUD 4000.1 is THE definitive source for the program now. One big question some borrowers have about FHA loans is what happens if an early payoff is chosen. Can the lender penalize or | more...

July 30, 2015

FHA Loans, Escrow Accounts, And Real Estate Taxes

By Joe Wallace

There are many FHA loan questions regarding the use of escrow accounts, especially when it comes to new purchase loans. Applicants sometimes get confused when the lender requires an escrow account. Since FHA loan rules do not require the use of escrow, some borrowers may wrongfully believe they don’t have to use them, period. But your lender may require the use of escrow and this is fully permitted under the FHA loan program. In fact, FHA loan rules anticipate some lenders requiring escrow for a variety of loan transactions; one use of escrow is to collect and pay property taxes. According to the FHA/HUD official site, “It is the lender’s decision whether the borrower must maintain an escrow account for the purpose of paying taxes and other items. The HUD | more...

June 16, 2015

CFPB Reminds HECM Applicants To Read The Fine Print

By Joe Wallace

The Consumer Financial Protection Bureau (CFPB) has published a consumer advisory warning those in the market for a Home Equity Conversion Mortgage Loan to pay special attention to the terms and conditions of the HECM loan, adding that some lenders are allegedly using false or misleading language in advertising about such loans. The first thing CFPB wants borrowers to know is that a HECM loan is just that–it’s a mortgage loan with legally binding financial agreements, not a government benefit. FHA HECM loans, which are guaranteed by the government, are not and should not presented as a benefit and require mandatory counseling about the HECM program. And that’s important to think about when shopping for a lender for your reverse mortgage or HECM loan; a participating FHA lender is required | more...

May 29, 2015

FHA HECM Loans With Set-Aside Accounts For Property Taxes

By Joe Wallace

The FHA and HUD have been making a number of revisions to the FHA Home Equity Conversion Mortgage program (FHA HECM) including changing the nature of payouts based on the type of HECM loan (adjustable rate or fixed rate) and many other alterations. One of the most recent changes is how the FHA expects participating lenders to deal with unpaid property taxes on an FHA HECM, which technically can result in the loan being declared due and payable. Some lenders and borrowers go into a HECM loan with an arrangement to have a set-aside account created specifically for the purpose of paying property taxes to avoid problems later down the line. But what happens if a HECM borrower lets that set-aside account lapse? When the property taxes begin to go | more...

May 27, 2015

FHA HECM Loan Rules: When Can A HECM Loan Be Declared Due In Full?

By Joe Wallace

There have been many changes to the FHA HECM (Home Equity Conversion Mortgage) program in recent months. If you are a qualified HECM loan applicant exploring your options now after having researched them a year or two ago, it’s likely you will need to re-familiarize yourself with the FHA HECM rules and regulations as many have had important changes made. HECM loans still feature the usual conditions–failing to use the home as the primary residence, for example, can still result in the HECM loan being declared due in full. That hasn’t changed, but some other conditions that trigger a due-in-full demand have. One such change involves when a HECM loan can be declared due in full because of failure to meet HECM loan “property charge” requirements. Did you know that | more...