May 30, 2014
FHA loan rules for new purchase home loans include regulations on how the cost of repairs can be added to the sale price of the home to be purchased with an FHA mortgage. Th rules for this are found in HUD 4155.1, Chapter 2 Section Five, which states: “Repairs and improvements may be added to the sales price before calculating the mortgage amount when the
May 30, 2014
Under the rules of the FHA loan program, borrowers and lenders negotiate together on interest rates for the FHA loan. The FHA does not set interest rates, and it’s also not responsible for regulating them aside from a general requirement that the rates be comparable to similar types of loans. In recent times you may have noticed headlines and advertising discussing the idea that mortgage loan rates in general are as low as they’ve been in some time. At the moment it’s a very good time to be exploring your options as an FHA loan applicant or refinance loan applicant. Rates have recently hit eleven month lows and qualified borrowers with excellent FICO scores have found rates as low as 4.0% or even lower depending on what’s being offered by | more...
May 29, 2014
A reader asks, “Are there any fees associated, with a FHA loan? I was contacted after inquiring online about a loan and the representative informed me that it would be a fee of $11.00 for credit reports and a fee of $149.00 which normally would cost $350.00 for the application process and additional fees of about $49.00 until credit score was at least 620..need to know if this is legitimate before I pay these fees.” FHA loans do involve fees. A reading of HUD 4155.1 Chapter Five reveals the following:
May 28, 2014
A reader asks, “Whats the least amount of income for an FHA home loan?” This is a common question, but the real question a borrower should be asking in these cases has more to do with how much money goes out in payment to financial obligations versus how much money is coming in. That is known in lending circles as the debt-to-income ratio. The specific answer to the borrower’s question here is that there is NO minimum income requirement listed in the FHA loan rulebook. “FHA’s mortgage programs do not typically have maximum income limits for qualifying, although you must have sufficient income to qualify for the mortgage payment and other debts.” That’ is a quote from according to a HUD publication titled “100 Questions And Answers About Buying a | more...
May 27, 2014
A reader asks, “Hello, my credit score is 540, I
May 26, 2014
Today we pause our usual posts about FHA loans and related issues, in honor of Memorial Day. We
May 23, 2014
When you want to purchase a home using a single-family FHA home loan, you should know what the FHA loan program’s requirements are for occupancy of the property. Did you know you are required as a borrower to certify you’ll use the home as your personal residence? FHA loan rules in HUD 4155.1 explain these rules and how they apply to the borrower. There are many questions about occupancy including whether or not a borrower can purchase a single family home and rent out individual rooms, or whether a multi-unit property can be obtained and rented out. Essentially, the FHA single-family home loan program rules state the following: “At least one borrower must occupy the property and sign the security instrument and the mortgage note in order for the property | more...
May 23, 2014
A reader asks, “My student loans are in my name, because my parents wanted to get my credit/payment history started early, but they pay the loans
May 22, 2014
When you apply for an FHA mortgage loan, you’re required to submit a variety of data including your employment history. It’s the FHA loan officer’s job to insure an applicant has sufficient income to afford the loan, and to make sure that income is likely to continue. How does the lender do this? FHA loan rules spell out clearly what’s to be done–HUD 4155.1 Chapter One, Section B explains how it works. To begin: “The lender must obtain the most recent pay stub showing year-to-date earnings of at least one month, and one of the following to verify current employment:
May 21, 2014
In a recent blog post we were asked about FHA down payment requirements–is there such a thing as a “no down payment” FHA loan? Some borrowers might mistake the VA loan program’s zero down payment option for something the FHA officers, but the truth is that FHA loans require a minimum of 3.5% down for single-family home loans. Not only that, but the money for your down payment has to be documented and come from an acceptable source. The reason for this is twofold–it prevents borrowers from over-leveraging themselves with cash withdrawls or cash advances on credit cards (credit card cash advances can’t be used to make down payments on an FHA home loan) and it keeps people with a financial interest in the transaction from loaning money for the | more...