Articles Tagged With: FHA Mortgage

April 23, 2024

What You Need To Know About FHA Loan Closing Costs

What must you know about FHA home loans, cash to close, and your obligations at closing time? If you are a first-time homebuyer, it’s easy to get confused (initially) about the difference between your down payment money, closing cost funds, and other expenses like the home inspection. Some of the early confusion comes from the fact that some do not understand the FHA philosophy about the down payment and the other expenses associated with closing day. That money is not lumped into your downpayment requirement when you pay closing costs. In other words, if you pay X amount of money at closing time for things like the FHA Up-Front Mortgage Insurance Premium and other expenses, that money is NOT considered part of your FHA loan downpayment. HUD 4000.1, the FHA | more...

April 18, 2024

Mortgage Borrowers At Risk In 2024?

By Joe Wallace

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...

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...

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 3, 2024

First-Time Home Buyer Tools You Should Know

By Joe Wallace

Are you buying a home for the first time? Are you buying a home after a long gap in home ownership? There are some consumer tools you should know about that can help you get closer to owning your dream home. Not all these tools are for the loan planning and saving stages. For example, when house hunting, if you find a home you want, do you know how much your monthly mortgage payment will be? You can use online mortgage calculators to help. But that’s a common mortgage tool–what about other options? Credit Issues Borrowers who need to work on their credit might be surprised to learn that they can repair their own credit AND get advice on improving credit on a do-it-yourself basis. Do you know the three | 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 27, 2024

Buying A Home With An FHA Loan After A Deed-In-Lieu Of Foreclosre

By Joe Wallace

If you experienced trouble with a past home loan and made arrangements to surrender the deed of the home in lieu of foreclosure, it is easy to understand why you might assume you wouldn’t be eligible for another home loan. There is GOOD NEWS on this front, however. This assumption is not true. You CAN become eligible for a new FHA mortgage once you meet certain requirements. What do FHA loan rules in HUD 4000.1 say about getting a new FHA mortgage following a deed-in-lieu of foreclosure? We get many questions about issues like these. One variation on a common FHA home loan question goes like this; “I completed a deed-in-lieu of foreclosure a few months ago. According to the government guidelines, how long do I have to wait before I | more...