Articles Tagged With: FHA Loan Approval

April 18, 2024

Mortgage Borrowers At Risk In 2024?

Are FHA mortgages and other types of mortgages riskier in 2024? The answer may be YES thanks to a currently elevated potential for mortgage fraud initiated by scam artists. Fraud prevention company Funding Shield reports high fraud vulnerability in roughly half of all “portfolio loans,” including residential mortgages, in the first three months of 2024. According to HousingWire.com, such problems seem to arise due to a “lack of appropriate controls” related to closing procedures. In some cases, these problems are not related to a residential real estate borrower or seller, but for one specific aspect of the mortgage process, FHA mortgage loan applicants may be at an elevated risk. Wire Fraud Scams And Your Mortgage The Funding Shield report includes data about closing cost-related wire fraud vulnerabilities. Those potential problems | more...

April 17, 2024

Questions To Answer Before You Start Househunting

By Joe Wallace

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 16, 2024

What Some Get Wrong About Home Loans

By Joe Wallace

There is plenty of bad information about home loans out there. Many persistent myths color a house hunter’s opinion of certain mortgage options including FHA loans. What kind of misinformation is there in this area? It includes the wrong notion that FHA loans have need-based guidelines, such as an income cap, or that they are only for first-time home buyers. Both of those are untrue. Did Fox Business News Get It Wrong About Mortgages? In April 2024, the Fox Business News article, Today’s 15- and 30-year mortgage rates rise ran some information about the home loan process including a section discussing rate locks. The article includes the following, quoted verbatim: “A mortgage rate lock lets you lock in the current mortgage rate for a certain amount of time — often | more...

FHA Home Loans And First Time Home Buyers

April 10, 2024

Check Your Credit Before You Apply For An FHA Mortgage

By Joe Wallace

FHA home loans have forgiving credit qualifying requirements compared to some conventional mortgages. But even with more lenient qualification standards, FHA borrowers must still financially qualify for a mortgage. This is done (in part) using the borrower’s FICO scores and credit history information. What can a borrower do to raise FICO scores and improve credit reports before applying for a new home loan? Research Your Options If you haven’t worked on your credit for a while, research the industry before you begin. Credit agencies, including Equifax, Experian, and TransUnion, offer updated consumer credit tools, credit scores, and credit report monitoring services. Did you know you can sign up for electronic credit alerts, credit report monitoring, and other online services through credit reporting agencies? That’s not all. Experian is one credit | more...

April 9, 2024

Will FHA Loan Policies Change After The NAR Settlement?

By Joe Wallace

It was a legal move that stunned the mortgage industry. The National Association of Realtors (NAR) agreed “to pay $418 million over roughly four years to resolve all claims against the group by home sellers related to broker commissions,” according to a CBS News report. The settlement also affects how much in real estate commissions may be paid by the seller. The old 6% requirement has been eliminated. Federal agencies, including the FHA and HUD, are now working to assure customers and clients that the news won’t upend certain aspects of the FHA loan process. The Settlement Thanks to the proposed settlement, sellers may potentially pocket the savings they get by not having to pay the old traditional 6% MLS listing fee. Could those savings encourage some home sellers to | more...

April 4, 2024

Home Loan Interest Rates To Fall In Spring?

By Joe Wallace

In the end-of-year predictions leading up to 2024, there was talk about a housing market recovery. And there was further talk that such a recovery might happen in Spring 2024. Now, some have revised their predictions. Those revisions are based in part on the housing market recovery’s progress to date. But there is also discussion about what the Fed might do about interest rates in the Spring and Summer of 2024. Will Mortgage Rates Change In Spring 2024? Many anticipate the Fed cutting interest rates in late spring or early summer. But those cuts are not directly applied to mortgage rates. So, what is the Fed talking about doing here? The act of adjusting the rate for lenders who loan money to the public. Lower rates for the lender can | more...

April 2, 2024

FHA Home Equity Conversion Mortgages In 2024

By Bruce Reichstein

As further news comes in about improving housing market conditions (however slowly the market may improve), some homeowners are again thinking about their options, including FHA refinance loans and programs that let borrowers take the equity in their homes out in cash. For those reviewing FHA loans, options can include cash-out refinancing as well as an option for those 62 or older who own their homes or have nearly paid them off. FHA Reverse Mortgage Facts The FHA reverse mortgage allows a qualified borrower to get cash at closing time on a loan that is not due until the borrower dies, sells the home, or stops using it as their home address. Borrowers do not make mortgage payments with an FHA reverse mortgage. However, there are payments to be made. | more...

April 1, 2024

Home Loans In 2024: The First Quarter

By Joe Wallace

The first quarter of 2024 was a positive one for some house hunters. But many are wondering if rates will get closer to the mid to lower 6% range soon and whether to wait until that happens to start planning for a new FHA mortgage. A CNBC news report on mortgages published in the first quarter says there was higher demand in first three months of 2024. Higher demand potentially means higher sale prices, but not always. This year, it’s likely that is one of many contributing factors to the current rate environment. Did the supply rise to meet demand in Q1? CNBC notes that inventory went up nearly 6% overall. That meant as many as a million houses were for sale at the end of February. Home Sales Up | more...

March 26, 2024

FHA And HUD Offer Foreclosure Avoidance Option

By Joe Wallace

In late February 2024, the FHA announced a new home retention option for borrowers with FHA single-family home loans who may experience financial trouble along the way. The FHA Payment Supplement Program Is An Important Option The FHA Payment Supplement allows participating FHA lenders to temporarily alter the terms of the FHA loan to lower monthly payments without changing the home loan interest rate. This adjustment is not permanent but is designed to help borrowers avoid foreclosure during financial difficulties. FHA lenders working with borrowers in financial trouble now can lower the FHA mortgage payment by as much as 25%. That is meant as a temporary reduction designed to help those who can’t keep up with payments and have an FHA loan with an interest rate lower than current rates. | more...

March 25, 2024

Housing Market Recovery Predictions

By Joe Wallace

Q1, also known as the first quarter of the year, is ending, and market watchers are reassessing some of their earlier housing market recovery predictions. As Q1 2024 ends, some at Fannie Mae are saying yes, the rates are recovering, but they are moving more slowly than some would like. At the time of this writing home loans with 30-year fixed rates are at approximately 6.87%. That feels closer to the 7% range than some would like, but the rates do seem to be moving lower. Multiple factors contribute to the slower-than-hoped-for rate recovery, but none of them indicate that we will experience a shock return of much higher rates. Fannie Mae has gone on the record with a. revised mortgage rate outlook for 2024. The agency now says rates | more...