June 25, 2017

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Articles Tagged With: FHA Home Loans

FHA loan income requirements

FHA Loan Income Requirements

How much or how little can you earn and still qualify for an FHA loan? Do you know what the FHA loan income requirements are for the type of mortgage loan you seek? The truth is, the FHA home loan program does not specify a minimum (or maximum) dollar amount necessary to qualify for an FHA home loan or FHA refinance loan. Instead, the lender is required to make sure you qualify with FICO scores, credit history, and an acceptable debt-to-income ratio. FHA Debt To Income Ratio There are two ways your participating FHA lender will review your income compared to your financial obligations in order to qualify you for an FHA mortgage. The first is to review the amount of verifiable income you bring in and compare it to | more...

 

FHA Jumbo Loans

FHA Jumbo Loans, also known as non-conforming loans, are mortgages that exceed the county limit for mortgage loans in that area. FHA home loans in excess of these limits (also known as FHA loan limits) are possible, but there are some important factors you should know about before applying. FHA Jumbo Loans Are Like “Standard” FHA Mortgage Loans Some borrowers want to know if they can apply for an FHA Jumbo Loan that exceeds the value of the home and take the remainder of the mortgage loan out in cash at closing time. FHA home loans are specifically designed to prevent cash back to the borrower at closing time except in the form of legitimate refunds. If you paid cash for something up front that was later financed into the | more...

 
Do I need mortgage insurance?

Do I Need FHA Mortgage Insurance?

In a recent blog post we discussed the differences between FHA mortgage loans and conventional home loans. One of the most important differences between FHA mortgages and conventional loans is the mortgage insurance requirement. Conventional loans may, depending on the size of your down payment and other factors, require the borrower to put as much as 20% down. Those who do not put a certain percentage down on a conventional mortgage may be required to carry private mortgage insurance (also known as PMI). FHA home loans, on the other hand, require a minimum 3.5% down payment and have no private mortgage insurance requirement. However, FHA mortgages do require the borrower to pay for mortgage insurance. This requirement includes an Up Front Mortgage Insurance Premium (UFMIP) and a monthly payment (MIP). | more...

 

How Is An FHA Loan Better Than A Conventional Loan?

What are the major differences between FHA loans and conventional loans? Do you know why people choose FHA over conventional mortgages? There are many reasons, depending on the borrower, but let’s examine how FHA loans differ to see what advantages you may find with a participating FHA lender. FHA Loans Versus Conventional Loans: Interest Rates Depending on your FICO scores and other financial qualifications, you may be required to put as much as 20% down on a conventional mortgage loan. Compare that to the FHA-required minimum down payment of 3.5% of the adjusted value of the property. Down payment requirements can and often do depend on your credit score, and for FHA mortgages, HUD 4000.1 (the FHA Single Family Loan Handbook) states that borrowers with FICO scores 580 or higher technically | more...

 

The Down Payment Requirement For FHA Loans

FHA home loans, much like their conventional counterparts, have a down payment requirement. However, unlike conventional loans, the minimum down payment requirement for FHA mortgages is 3.5% of the adjusted value of the home. This lower down payment requirement is one of the main advantages of the FHA mortgage. The basic amount of the down payment varies with each FHA mortgage since the payment is based on the value of that particular home. Additionally, FHA mortgages require a specific FICO score range (580 or better) for maximum financing. Borrowers with FICO scores between 500 and 579 will be required to put down 10% instead of 3.5%. Additional lender standards may also apply. Calculating the amount of your down payment is only part of the process. FHA borrowers must provide down | more...

 

FHA Loan Questions: Credit Score

Do FHA loan rules require more than one credit score for a borrower to qualify for a mortgage loan? That’s what one reader wants to know this week: “Can you tell me if FHA can lend if someone only has one score? It’s a 621 score. This home buyer had a short sale four years ago and did not rebuild credit as she decided not to get any credit cards. She has a debit card and that is it. Please advise if one score would be accepted?” FHA loan rules for credit score requirements are found in HUD 4000.1, the FHA single-family home loan rule book. HUD 4000.1 has instructions to the lender for credit score requirements which include the following about what is called the Minimum Decision Credit Score: | more...

 

FHA Appraisal Questions: Defective Conditions

A reader asks a question about FHA appraisal issues: “Bought a house that was supposedly totally renovated about a 1.5 months ago. Finding out about major issues and violations in the house. There were a lot of concealed things hidden…found they had unlicensed contractors.” “Didn’t have the money to do a regular home inspection. People were saying FHA does their own home inspection to make sure house is safe…problems with windows plumbing illegal hookup with water main electrical box etc. Have to make a payment to mortgage plus fighting with seller to get licensed contractors…please tell me why didn’t FHA see these issues.” FHA appraisals must never be confused with a home inspection. The FHA and HUD warn borrowers of this in a document found on the FHA/HUD official site | more...

 

FHA Loan Application Data: What You Should Know

The FHA single family loan program rule book, HUD 4000.1, has a variety of rules and instructions to the lender on how FHA loan application information is to be handled and processed. You might not think those rules affect you as an applicant, but some of the rules do pertain to how the lender must collect the borrower’s information and the approved sources of that information. Your credit scores and other data must be given to the lender from approved sources. Did you know that HUD 4000.1 does not permit the borrower to handle or transmit certain kinds of information to the lender? Your loan officer is responsible for making sure she gets the information from the proper sourcing. According to HUD 4000.1: “Mortgagees must not accept or use documents | more...

 

FHA Loan Rules For Bankruptcy: Chapter 7 and Chapter 13

We’ve had a number of reader questions in our comments section recently asking about scenarios for loan approval that involve bankruptcy and related issues. Can a borrower get a new FHA loan following a bankruptcy? Under what conditions? FHA loan rules in HUD 4000.1 address this issue with separate entries for Chapter 7 and Chapter 13. According to the FHA loan rule book, Chapter 7 requires the lender to observe the following: “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 the bankruptcy discharge. During this time, the Borrower must have: – re-established good credit; or – chosen not to incur new credit obligations.” HUD 4000.1 | more...

 

Are You Ready For An FHA Mortgage?

Are you ready to apply for an FHA mortgage in 2017? There are several areas that borrowers should spend plenty of time examining before filling out paperwork or online forms to apply or get pre-approved for a mortgage loan. Credit Reports If you do not know what your lender will see when she pulls your credit report, there’s a good chance you are not ready to fill out FHA loan paperwork. Why? Because if there are errors on your report, questions over certain accounts that may need to be disputed or contested, evidence of identity theft, those will all need to be dealt with before you apply for your loan. A lender can work with a borrower who has disputed accounts still pending (assuming the lender’s standards permit) but if | more...