June 27, 2017

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Articles Tagged With: FHA Loan Requirements

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 Loans For Additional Homes: A Reader Question

Are FHA loans for multiple properties possible? That’s what’s on one reader’s mind recently. “So is there a maximum number of properties one can theoretically have under FHA guidelines?” “Say for example a person owns a home in one city with an FHA mortgage and then has to relocate to another city for job reasons. While in this city there family size increases by several individuals via marriage and or kids. Would that person be able to get a 3rd FHA? mortgage.” This reader question about FHA loans is in response to a blog post we did recently about the issue of applying for another FHA mortgage while currently paying on an existing FHA home loan. The gist of that post is that while FHA loan rules do not generally | more...

 

FHA Loans and Co-Signers: A Reader Question

A reader asked us a question about FHA loans and co-signers recently. “If I cosigned for a friend and he refinanced to get everything put in his name and me taken off, am I eligible for an FHA loan for my own home?” FHA mortgage loan requirements refer to co-signer arrangements and “contingent liabilities”. HUD 4000.1 says: “A Contingent Liability refers to a liability that may result in the obligation to repay only when a specific event occurs. For example, a contingent liability exists when an individual can be held responsible for the repayment of a debt if another legally obligated party defaults on the payment. Contingent liabilities may include Cosigner liabilities and liabilities resulting from a mortgage assumption without release of liability.” If the reader’s circumstances meet that definition | more...

 

FHA Loans For Mixed-Use Property

A reader got in touch with us in the comments section recently about purchasing mixed-use property with an FHA loan. “I’m looking to buy a 4-unit building that also has a store front. I reside in Indiana…I will be living in one of the units in said property. Is there any type of loan that I can secure to make this purchase?” FHA loan rules permit the purchase of properties between one and four units. For mixed-use property, commercially zoned residential property or other non-traditional purchases, HUD 4000.1 states: “The non-residential portion of the total floor area may not exceed 49 percent. Any non-residential use of the Property must be subordinate to its residential use, character and appearance.” “Non-residential use may not impair the residential character or marketability of the | more...

 

FHA Condo Loans: A Reader Question

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...

 
Mortgage Loan Rate Trends

Mortgage Rate Trends: Higher

Mortgage loan interest rates went higher on Friday, undoing some of the gains made earlier in the week but keeping things within the range we’ve been looking at since the start of 2017. The move higher wasn’t enough to push many lenders away from their earlier offerings; affected borrowers likely saw the results of Friday’s move reflected in closing costs in some markets, where actual changes to the rate may have occurred with some lenders. 30-year fixed rate conventional mortgages were reported in a range between 4.125% and 4.25% on Friday (best execution). FHA mortgage rates remain in their 3.75% comfort zone. The ups and downs, give-and-take activity of recent weeks isn’t really enough to push FHA mortgage rates out of that zone without either a day’s worth of dramatic | more...

 
Mortgage Loan Rate Trends

Mortgage Loan Interest Rate Trends: Two-Week Lows

Mortgage rates took a move lower on Monday to levels many have been hoping to see more of in the last two weeks. Though the move does not dramatically change mortgage loan interest rate numbers, could we be on the start of a short-term trend due to global economic uncertainty? Some of our sources seem to think that at the very least, today’s downward movement was inspired by investors seeking safer havens, with mortgage rates reaping the benefit of their investment activity. 30-year fixed rate conventional mortgages are now reported in a best-execution range between 4.125% and 4.25%. Affected borrowers may notice the changes reflected in closing costs rather than an actual rate adjustment. FHA mortgage rates continue in their best execution comfort zone at 3.75%. FHA rates often take | more...

 

FHA Mortgage Facts You Should Know

FHA mortgage loans are a very good option for borrowers looking for a lower down payment and less stringent credit requirements than conventional mortgages. Did you know that FHA home loans do not feature a minimum or maximum income requirement? A borrower’s ability to qualify for an FHA mortgage depends on FICO scores, debt-to-income ratios, credit history, and other factors but there’s no “qualifying dollar amount” for income in terms of minimums OR maximums. Some believe that FHA mortgages are only for first time home buyers, the economically disadvantaged, or only for typical suburban homes. But FHA home loans are available to anyone who is financially qualified and wants to use the property to be purchased as their primary residence. FHA mortgages require only a 3.5% down payment in typical | more...

 
FHA home loans

Cash Back To The Borrower and FHA Loans

Do FHA loans permit cash back to the borrower? We get many reader questions in our comments section about this subject. Some want to know if they can borrow more than the cost of the home and use the excess funds for personal use. Others want to know if cash-back refinance options are available on FHA mortgages. The rules that govern cash back to the borrower can be found in HUD 4000.1. As a general rule, FHA loans for “forward mortgages”, which means typical house purchases, do not allow cash back to the borrower. There’s an exception for money that was paid up front for something that was later permitted to be included into the loan amount. That would be considered a refund and is not forbidden by FHA loan | more...

 

Income Documentation: A Reader Question

A reader got in touch with us this week to ask a question about the FHA requirements for income documentation: “I work on a commission basis where a large part of my income does not appear on my w2. Say I make 4,000.00 in commission my expense to do my job is 1,000.00 my employer will write a check to me for that amount and them deducts it from my 4000.00 commission and then I am taxed on the remaining 3,000.00.” “I am at the end of the loan process and the underwriter is requesting a letter of explanation from the employer and she will not respond. Does she have to legally comply and how long can she take?” Unfortunately this falls dangerously close to asking for legal advice, and | more...