Articles Tagged With: FHA Home Loan

April 17, 2024

Questions To Answer Before You Start Househunting

Making assumptions about the home loan process can hurt you. For example, some borrowers believe the FHA loan program is wrong for them because they aren’t financially disadvantaged. That assumption is not true. Others wrongly believe it is impossible to qualify for an FHA loan because they have less-than-perfect credit. This is sometimes true depending on the circumstances but if your FICO scores are above 500, this type of mortgage is worth considering. Additional lender standards may apply but the FHA loan program offers more forgiving credit requirements than some conventional equivalents. Any Residence Can Be Purchased With An FHA Mortgage? FHA single-family home loans are not permitted for investment properties. That said, it’s possible to use an FHA mortgage to buy a one-to-four-unit property but the borrower must live | more...

April 15, 2024

FHA Loans and Home Inspections

By Bruce Reichstein

The difference between an FHA appraisal and a home inspection is a serious issue. Borrowers applying for an FHA mortgage to buy a home must have an FHA appraisal to ensure that the property meets minimum standards. But when a home passes the appraisal process or allows the loan to go through as long as required corrections are made, does that mean the property has been inspected and approved by the FHA? Not according to the FHA official site, which says an appraisal is never a guarantee or endorsement of any kind. Borrowers should know that the purpose of the appraisal is to establish the home’s fair market value and ensure that the home meets the minimum standards. However, the appraisal is not intended to discover any/all issues with a | more...

March 20, 2024

What To Know About FHA Loans And Escrow

By Joe Wallace

FHA loans typically involve some form of escrow. Some FHA loans have different escrow requirements than others and you should know what your specific loan type will require before you commit. What Is Escrow? Finance blogs often describe escrow as an arrangement where a third-party account retains money to facilitate a home loan. It’s done on behalf of the borrower and lender and money comes out of the account based on specific conditions or instructions. You can expect to use escrow to pay for property taxes, paying contractors for labor or materials, and even earnest money if you and the lender agree. Escrow provides a layer of protection for both borrower and lender and it pays to know as much as you can about how it works before you commit | more...

March 12, 2024

Home Loan Rules New Buyers Should Know

By Joe Wallace

Your participating lender will provide you with loan guidelines, including certain restrictions on the source of your down payment funds. Did you know that FHA loan rules forbid the seller of the home from contributing toward the borrower’s down payment? That is a very important rule a first-time homebuyer should know when thinking about applying for home loans. Seller Assistance With Closing Costs Your seller IS permitted to offer assistance with closing costs, and those funds will be applied to approved expenses related to your home loan. The seller is allowed to contribute up to six percent of the sale price of the home (this amount may be less for some mortgages, like VA loans) toward your closing costs. Incentives To Purchase? But the seller CANNOT provide money above and | more...

March 11, 2024

FHA Loan Down Payment Advice

By Bruce Reichstein

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...

March 7, 2024

Changes To FHA Manufactured Housing Loans

By Joe Wallace

Did you know that some 20 million Americans live in manufactured housing? Most government-backed mortgage programs offer loans to these borrowers. That includes FHA home loans for manufactured housing, modular houses, and mobile homes. There’s a separate FHA loan for these homes like there are separate FHA condo loans and construction mortgages. The FHA and HUD are working to expand manufactured housing options through the FHA Single-Family Home Loan Program and are offering new options to organizations responsible for multi-family housing. HUD To Increase Availability Of Affordable Manufactured Homes WhiteHouse.gov issued a press release on the federal government’s efforts in 2024, noting, “Manufactured housing is a critical source of affordable housing, especially for low-income, rural, and Native American households and offers a potentially lower-cost pathway to homeownership.” Manufactured housing, also | more...

February 26, 2024

FHA Loan Basics In 2024

By Joe Wallace

Are you new to FHA loans? Do you feel the list of requirements is a bit overwhelming? You are not alone. Many first-time home buyers experience these feelings as they get to know the home loan landscape. The good news is that your confusion will end the more you learn about how home loans work. Here is some clarity on some common FHA loan basics that some newcomers find confusing in the early days of mortgage planning. FHA Loan Approval Basics Looking at finance blogs, you will find a variety of FHA home loan requirement lists. Here is an example of one, published by NerdWallet. There are important nuances to understand about the list above. before you proceed. Let’s review each section of this list. To start, it is true | more...

January 31, 2024

How FHA Mortgages Compare To Conventional Loans

By Joe Wallace

How do FHA mortgages stack up to their conventional loan counterparts? Typical down payment issues are the most obvious comparison. The FHA has a 3.5% requirement, and conventional loan requirements vary. There are some important differences to know before you choose which mortgage loan is best for your needs. FHA Loan Best Practices FHA mortgages have two sets of rules. FHA loan program guidelines but also, lender standards like all mortgages. The FHA requires its participating lenders to keep policies that benefit the borrower. One example is the loan rule requiring ZERO penalties for early payoff of the loan. Another perk? The option to refinance later with an FHA no-credit-check streamline refinance loan option. Not all borrowers may want this option (no cash out is allowed) depending on what kind | more...

January 22, 2024

Getting A Better FHA Loan Interest Rate

By Joe Wallace

CBS News offers some advice to house hunters in 2024. Are you interested in buying a home with a lower interest rate? CBS has some advice for you, and as their published article reminds us, mortgage rates are falling in early 2024, but there are also ways to enhance your ability to get a lower rate. The CBS report dispenses some advice to help homeowners take advantage of existing options that can earn qualifying borrowers an even lower rate. But is the CBS advice sound? We examine their perspectives on getting a better rate on your home loan below. Shopping Around For A Lender CBS advice includes the idea that it’s best to shop around and find a lender offering the most competitive FHA loan rates and terms. Consider shopping | more...

January 9, 2024

Remodeling Options With An FHA Loan in 2024

By Joe Wallace

The FHA 203(k) rehabilitation mortgage is a type of FHA loan you can use to buy and renovate a home, or refinance an existing mortgage and improve the property at the same time. Buy Or Refi? Do you want to buy a fixer-upper home with an FHA 203(k)? Do you need to refinance your existing mortgage and renovate? These are both possible. The options for 203(k) refinancing also include the ability to refinance a non-FHA mortgage into an FHA loan, and you also have the ability to finance certain closing costs. The FHA 203(k) purchase loan offers borrowers a chance to buy a house that would normally not pass an FHA appraisal. Under the FHA rehab loan program, you can hire builders to do renovations to bring the house up | more...