Articles Published in: March 2017

March 22, 2017

Refinancing Your FHA Mortgage

There are many reasons why people refinance a home loan. Some do it to lower their interest rates, others may wish to cash in on the equity built up in the home over time. Still others might want to do upgrades or repairs to the home but don’t want to pay all the costs out-of-pocket. The reasons you refinance may vary, and for that reason there are a variety of choices when it comes time to consider an FHA refinance loan. Lower Interest Rates The FHA streamline refinance option lets borrowers apply for a loan using their original loan application data. There is no FHA requirement for a new credit check or appraisal. (Your lender may require one or both.) FHA streamline refinance loans must result in a tangible benefit | more...

March 22, 2017

Mortgage Rate Trends: Still Moving Lower

By Joe Wallace

Mortgage rate trends continue to point to lower numbers post-Fed. Since our last report we’ve seen more downward momentum, thanks in no small part to some unfavorable stock market activity. Political and economic uncertainty often sends investors running for the security of safer investments and this week seems to have some classic examples of that happening. Which means, looking back, that we’ve watched mortgage loan rate trends shift from the upward momentum that brought on rates that hit multi-year highs to the current environment that, while not multi-year lows, certainly is a welcome improvement. The most recent moves lower may be reflected in closing costs rather than actual mortgage rates (depending on the lender) but if the trend persists we’re likely to see that change soon. 30-year fixed rate conventional | more...

what is mortgage insurance and how does it work?

March 21, 2017

FHA Home Loans and Zoning: A Reader Question

By Joe Wallace

How are FHA home loans affected by zoning laws? A reader asked a question about this in our comments section recently: “I have a family who wants to purchase a home on commercial zoned property. The County has given a letter stating that they would allow the rebuilding of the residence as long as less than 75% was damaged in a disaster. The lenders are refusing to allow an FHA residential loan for the property. It is clearly residential use in commercial zoning. Whey would they refuse to abide by the rules you state?” This question is in reference to a 2011 blog post titled, “Can I Get An FHA Loan For A Commercial Property?” The FHA loan rules quoted in that post have since been superseded in their entirety | more...

March 21, 2017

Mortgage Rates Lower Post-Fed

By Joe Wallace

Since our last report, the Fed hiked interest rates. That comes as no surprise as it was widely expected to happen, and mortgage loan rates began rising ahead of that announcement as the industry began to anticipate the move. Once the Fed announcement happened, many sources point out that when rates began to fall again, it was due in part to adjustments following that anticipation. There is no single reason why mortgage loan interest rates rise and fall-any number of factors may combine to influence investors in the markets that directly affect these rates. But in the short term, single causes can and often do exert greater influences. Now that the Fed announcement has come and gone, what’s the state of mortgage rates in the short term? In general, they | more...

March 20, 2017

Fair Housing Act Settlement With Alpine Bank & Trust

By Joe Wallace

The Department of Housing and Urban Development (HUD) has announced a settlement in a Fair Housing case involving an Illinois lender. According to a press release at the HUD official site, a recent settlement with Alpine Bank & Trust settles allegations that, “the Northern Illinois-based lender discriminated against African American and Hispanic mortgage applicants.” According to the press release, HOPE Fair Housing Center located in Wheaton, Illinois, “filed a complaint with HUD claiming the lender’s business service areas excluded majority African-American and Hispanic neighborhoods”. Fair Housing Act regulations make it illegal for any person or company to discriminate against applicants for non-financial reasons such as race, religion, national origin, family status, gender identity, etc. According to the HUD official site, “HOPE Fair Housing Center alleged the bank’s lack of a | more...

Can I buy a manufactured home with an FHA loan?

March 20, 2017

FHA Loan Rules For Employment: A Reader Question

By Joe Wallace

FHA loan rules require the lender to verify a borrower’s employment-how long the borrower has been employed, the nature and duration of the job, the pay, and other factors that may be required by lender standards or state law. Sometimes it is easy to misunderstand these requirements, but many simply don’t know what the lender is looking for when verifying a borrower for an FHA mortgage loan. One reader got in touch with us to learn what the FHA loan rules are for employment, asking, “What is the required period of employment for FHA?” HUD 4000.1 provides the answer, stating: “For all Employment related Income, the Mortgagee must verify the Borrowers most recent two years of employment and income, and document using one of the following methods” which include “traditional” | more...

March 17, 2017

FHA Condo Loans: A Reader Question

By Joe Wallace

A reader asks a question in our comments section this week about FHA condo loans. “My husbands ex-wife failed to pay their condo dues and they foreclosed on the property (Not the bank.. the Condo Association). The property was deeded to a 3rd party by the court. The FHA Loan is still in my husbands name with no rights to the title.” “The property is being used as a rental and the bank will not ‘make’ them refinance the loan. They currently have been 2 months behind and continue to mark up his credit. No one seems to care Thoughts? Anything in the FHA Guidelines that addresses this?” Borrowers who find themselves in legal entanglements associated with FHA home loans or FHA condo loans should seek legal counsel. The advice | more...

March 16, 2017

FHA Loan Assumptions: A Reader Question

By Joe Wallace

How do FHA loan assumptions work? There are many situations where assuming another borrower’s FHA mortgage could be beneficial to all involved. Consider this reader question we responded to recently: “My mother in law took out an FHA loan due to illness preventing her from working. The lender allowed myself and fiance to make payments on her behalf based on our income in order for her to keep the house. Is it possible for her to sign the house over to us since her health is declining?” This is a circumstance where it would definitely help to know about FHA loan assumptions and how they work. The rules for this procedure is found in HUD 4000.1, which starts off with a definition. “Assumption refers to the transfer of an existing | more...

March 15, 2017

Chapter 13 Bankruptcy: A Reader Question

By Joe Wallace

A reader got in touch recently about issues related to Chapter 13 bankruptcy and FHA mortgage loans. “I made all payments for 6 years on my chapter 13 and they said I have to wait 2 more years to be approved when my credit score is over 730. I dont get it I paid my dues and still have to wait.” The primary confusion here is associated with the FHA loan rules in HUD 4000.1 regarding “seasoning” periods that are required in the wake of certain types of negative credit events such as a bankruptcy. The rules vary depending on the type of bankruptcy you have filed, but in the case of this reader question, let’s examine what FHA loan rules have to say about Chapter 13 bankruptcy: “A Chapter | more...

How much can I borrow with an FHA refinance loan?

March 14, 2017

Mortgage Markets and FHA Loans

By Joe Wallace

At the beginning of 2017, Forbes.com published a housing outlook for 2017 which included predictions from experts about what could happen this year. Three months into the new year, how accurate were some of the highlights of this piece? How do current trends affect mortgage loan applicants and those looking to refinance? A quick look at current events shows that some of the observations made at Forbes.com in an article by Samantha Sharf are absolutely right and there’s no reason to expect anything different in the short to mid-term. Consider the prediction made in this piece about mortgage rates. According to the article: “By historic standards rates are still low. In 2017 experts expect movement, but differ on where for the 30-year fixed rate will land. Estimates out there range | more...