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Articles in Category: FHA Requirements

FHA Mortgage Insurance

Home Loan Mortgage Insurance Requirements

When it is time to buy a new home, borrowers have important decisions to make about mortgage insurance. Do you know who is required to pay for mortgage insurance and why? There are home loan programs that offer the option of paying 20% down and sidestepping the lender’s mortgage insurance requirements. Other mortgage loans may require borrowers to come up with a larger down payment to take advantage of the option to stop paying mortgage insurance after 11 years.  Some mortgages have no insurance guidelines in this area at all. We examine these programs below. What To Know About Conventional Loan Mortgage Insurance There is no national standard for conventional loan mortgage insurance in terms of lender requirements. Borrowers can expect to pay 20% down on a conventional loan to avoid | more...

 
Is your credit ready for an FHA loan?

FHA Loan Down Payment Advice

Are you looking for a home loan with a lower downpayment requirement? In 2024, FHA home loans are a smart option to consider in such cases as the housing market slowly tries to recover. These down payments are often lower than their conventional mortgage equivalents, and borrowers who struggle to come up with the 20% down needed to avoid conventional private mortgage insurance, which is required on a conventional mortgage, may find a better option in the FHA loan program. According to the Consumer Financial Protection Bureau, those who don’t pay 20% down on a conventional loan may encounter down payment requirements of up to 15%.  “Most lenders offer conventional loans with PMI for down payments ranging from 5 percent to 15 percent.” The Bureau adds that “some lenders may | more...

 
Do You Need Down Payment Help?

FHA Mortgage Loan Rates And Cash To Close

If you want to buy a home using an FHA mortgage, the required minimum cash to close is one of the things you must plan and save for in the beginning stages of the loan. Some view the rates and costs as being separate…at first. Some borrowers quickly learn that FHA loan closing costs and the interest rate your lender offers may be more related than they realize. Much depends on which options the borrower decides to pursue. FHA Home Loan Closing Costs Your FHA loan cash-to-close requirements include the lender’s fee, your down payment, and other expenses such as the upfront mortgage insurance premium.  Some costs you can finance. One is the FHA upfront mortgage insurance premium. Other expenses cannot be added to the loan amount. That said, a | more...

 
Buying A Home with an FHA Loan

FHA Home Loan Costs And How They Vary

An FHA loan has several expenses including an appraisal, home inspection, and title search expenses. These costs are not standardized and may vary depending on where you buy the home. Aside from more obvious issues like FICO scores and how the lender uses them to determine your mortgage interest rate, what are some considerations to make in this area? We examine some key factors below. Location Counts One big factor in your costs for a mortgage? Where you conduct the transaction. As mentioned earlier location may play a role in the costs. And some borrowers assume that a service will cost more in a high-profile housing market. For example, a title search in California. Is this likely to cost more than one in Idaho? In some cases, the assumption isn’t | more...

 
FHA Loans

Who Needs Homeowner Insurance?

FHA loans, VA mortgages, and similar government-backed home loans don’t force the borrower to select specific types of homeowner insurance to protect your investment but that does not mean it’s not necessary. Mortgage insurance protects the lender. If the borrower defaults on the FHA home loan, mortgage insurance minimizes the loss for the bank. Home insurance, on the other hand, is a tool for the borrower. It protects your investment by insuring your home and its contents depending on the wording of your specific policy.  First And Foremost Paying for both insurance types may make you feel there is protection for all circumstances. But not all types of damage are covered by your insurer. Did you know that flood insurance is completely separate from insurance for water damage? Some borrowers | more...

 
FHA Mortgage Loan

First Time Home Buyers Should Know These FHA Loan Rules

There are some FHA loan issues that are crucial to understand before you commit to a lender or a mortgage.  For example, do you know what to do if the appraisal is lower than the asking price? Or how long you will pay for mortgage insurance? These are important things to know when planning and saving for your mortgage. FHA Loan Appraisal Issues If the house is not worth as much as the price tag, your participating FHA lender cannot lend more than the actual value of the property. This rule does not prevent add-ons to the loan, but the base loan amount is for the appraised value. If you want to buy a house that appraises lower than the asking price, you can’t finance the difference. You must pay | more...

 
FHA Home Loan

FHA Loans Versus Other Government-Backed Mortgages

There are three important government-backed mortgage loan options. They are FHA loans, VA mortgages, and USDA home loans. If you are new to these mortgage programs here are some basic facts about what to know when comparing these home loans. Basic Similarities Between FHA, VA, and USDA Home Loans How do these loans stack up to one another? These loans offer the lender federal government guarantees, reducing the risk to the bank and allowing the lender to offer lower-risk mortgages to customers with lower FICO scores or with other issues making it harder to qualify for a conventional loan. These loans also feature lower down payment requirements than some conventional lenders offer consumer benefits such as restrictions on your closing costs and what fees the lender is permitted to include. | more...

 
Is your credit ready for an FHA loan?

Fees and Services For Your Home Loan

What do first-time home buyers need to remember about buying a home with an FHA mortgage?  Many home loan services you need to get to closing day are not centralized and you may have to deal with multiple service providers. It’s good to anticipate the help you’ll need on your home loan journey. We explore some of those services below. Brokers And Agents A real estate agent can help new house hunters find a suitable home. It’s a third-party service you don’t have to use, but many choose to do so to make the process easier on them. A mortgage broker provides a service to those who need a lender. A broker can match you with a participating FHA lender willing to work with you but you are not required | more...

 
Do You Need Down Payment Help?

FHA Home Loan Down Payments

Most home buyers will make some form of down payment, with exceptions for those using VA mortgages with no money down for qualifying servicemembers, veterans, and surviving spouses. There is also no-money-down USDA loans, but these are need-based and have income caps. By comparison, FHA mortgages, with their low 3.5% down payment requirements, are attractive to many house hunters who want to save more money upfront on the mortgage. Do You Really Have To Put 20% Down? Some borrowers may hear stories of borrowers being required to pay 20% down. This would be true in cases where the home buyer wants to avoid mortgage insurance on a conventional mortgage. And while that is not the only down payment option offered in such cases the mere idea of paying 20% down | more...

 
Cash out refinancing

Five Reasons To Buy Your First Real Estate With An FHA Home Loan

FHA home loans are a great way to make your first real estate purchase. Are you looking at homes for sale and trying to decide the best mortgage loan for you? If you are a first-time home buyer and feel confused by what your real estate agent finds in MLS listing data while searching for “houses near me”, remember that the FHA mortgage loan option is available to anyone who financially qualifies. If you are talking to a real estate agent, do not forget that FHA loans are not restricted to first-time homebuyers or those who have never owned property. You can own other property and still buy a home as your primary residence using an FHA loan whether you’ve purchased another property or not. #5: FHA Loans Are Guaranteed | more...