Articles Tagged With: Real Estate

March 18, 2016

Mortgage Loan Interest Rate Trends: Improving

Thursday saw a decisive move lower for interest rates. After many days of upward movement, and some recovery earlier in the week following a Fed announcement (one that had no talk of another rate hike for now) it seems that rates are headed back down. This trend is being described by some market watchers as a delayed reaction to the Fed–are some lenders slower to update their mortgage loan interest rates due to recent volatility in the market? That’s what some are thinking. 30-year fixed rate conventional mortgages are now operating in a best execution range between 3.625% and 3.875%. That is a wider range than previously reported, though you will find variation among conventional lenders and your access to these rates depends greatly on your financial qualifications. (“Best execution | more...

March 16, 2016

FHA Loan Rules for “Expected Income”

By Joe Wallace

It’s easy for borrowers to get nervous about their debt to income ratio when trying to qualify for an FHA mortgage. Some, who may be concerned that their ratio isn’t good enough may look to expected raises, performance bonuses, or other types of future earnings that haven’t begun yet in hopes that those extra earnings might give them a better chance at loan approval. But what do FHA loan rules say about this type of expected income? The issue is addressed on page 2o7 of HUD 4000.1, starting with the FHA definition of expected income, provided to clear up any confusion over what may or may not be counted as such: “Expected Income refers to income from cost-of-living adjustments, performance raises, a new job, or retirement that has not been, | more...

February 1, 2016

Mortgage Rate Trends: Decisive Move Lower

By Joe Wallace

Friday saw mortgage rates moving decisively lower. Some very competitive lenders are offering best execution rates at 3.625% for 30-year fixed rate conventional mortgages according to our sources, but a more likely best execution rate on this type of home loan is around 3.75%. FHA mortgage loan rates are, best execution, still holding in the 3.5% comfort zone. But if there continues to be strong improvement in rates, or smaller amounts of improvement over a sustained period of time, we could see FHA rates break out into a range of rates with 3.5% at the upper end. Remember, best-execution rates are not available to all borrowers or from all financial institutions. Your FICO scores and other financial qualifications will be an important factor in your access to rates like these. | more...

When Is An FHA Loan Better Than A Conventional Loan?

December 31, 2015

FHA Loan Rules In HUD 4000.1 On Closing Costs, Discount Points

By Joe Wallace

FHA loan rules in HUD 4000.1 include some instructions to the lender about closing costs, discount points, down payment funds, and much more. Can a borrower use closing costs as part of his or her down payment? What does the FHA rulebook say about interest rate lock-in fees? There are many rules and regulations–borrowers and lenders alike should be familiar with the guidelines. For example, when it comes to the down payment question, FHA loan rules are clear that the down payment money is a separate and distinct thing from closing costs. Specifically, HUD 4000.1 states: “The Mortgagee is not permitted to use closing costs to help the Borrower meet the Minimum Required Investment (MRI).” So that means an FHA borrower will need to budget for both closing costs and | more...

December 28, 2015

Planning For An FHA Refinance In 2016?

By Joe Wallace

Are you considering refinancing your home in 2016? There are several things you’ll want to consider planning, budgeting, or saving for in the new year. Having plans to examine these important issues connected to an FHA refinance loan can help you get organized and stay organized in the new year. Those issues include deciding on the type of loan, purchasing discount points, and the possibility of applying for extra funds to make energy efficient improvements in the home. For starters, it’s good to consider the type of refinancing you are interested in. Do you want lower payments and/or interest rates? Consider a Streamline FHA Refinance loan. Streamline refinances don’t have an FHA-required credit check or appraisal (though your lender is free to require one or both). For non-credit qualifying and/or | more...

December 11, 2015

Mortgage Rate Trends: Higher Ahead Of Retail Sales Report, Then Lower On Friday

By Joe Wallace

Thursday saw mortgage loan interest rates move higher ahead of this week’s much-anticipated retail sales report. On Thursday we saw 30-year fixed rate conventional mortgage loans move higher (4.0% best execution depending on the lender), though borrowers may notice the increase in closing costs instead of an actual higher number from the day before. The FHA mortgage loan rates stayed (best execution) in the 3.75% comfort zone, but those who shop around for a lender will notice more variation in FHA mortgage loan rates than with conventional equivalents. And then there was Friday–a day where the Retail Sales report could have been a spoiler for rates depending on the report and investor reaction to it. But at the end of the day, rates moved lower, putting 30-year fixed rate conventional | 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 10, 2015

FHA Appraisals and Air Conditioning Units

By Joe Wallace

A reader got in touch with us recently to ask whether a home with window-mounted air conditioning units could pass an FHA appraisal. Unfortunately the answer to this question isn’t as simple as a yes or no–there are several factors involved that may determine how an FHA appraiser views such units. The first and most obvious would be the condition of the units themselves. FHA appraisal rules require all mechanical systems in the home to be in good working order or be brought into compliance with that requirement through repair or replacement. The appraiser’s job would be to determine whether or not the general state of the window units–where permitted–is acceptable. But there are a few other unanswered questions–do these window units act as a replacement for a faulty or | more...

December 9, 2015

HUD 4000.1 On Waiting Times For New Loan Applications Post-Chapter 7 Bankruptcy

By Joe Wallace

In our last blog post we discussed the rules found in HUD 4000.1 about waiting times for borrowers who want to purchase a home with an FHA mortgage after a Chapter 13 bankruptcy. The FHA single family home loan rule book also has instructions for lenders and borrowers about mandatory waiting times and other requirements for those seeking a home after a Chapter 7 bankruptcy. Borrowers with a Chapter 7 may not automatically be barred from another home loan, but FHA mortgage loan rules do require certain things of the lender and the borrower. From HUD 4000.1: “A Chapter 7 bankruptcy (liquidation) does not disqualify a Borrower from obtaining an FHA-insured Mortgage if, at the time of case number assignment, at least two years have elapsed since the date of | more...

December 9, 2015

HUD 4000.1 On Post-Chapter 13 Bankruptcy Waiting Times For A New FHA Loan

By Joe Wallace

The recently-published rulebook for FHA single family mortgages, HUD 4000.1, contains new rules and guidelines for participating lenders, plus rules that have been updated, clarified, or restated from the previous editions of the rules. One important area of the new rule book pertains to potential FHA loan applicants who want to apply for a new loan following a Chapter 13 bankruptcy. We get many comments and questions each month involving scenarios where a borrower wants to apply for a new home loan following a bankruptcy. Since the publication of the new rules, what does the FHA/HUD have to say about filing for a new mortgage following a Chapter 13? From HUD 4000.1: “A Chapter 13 bankruptcy does not disqualify a Borrower from obtaining an FHA- insured Mortgage, if at the | more...