June 27, 2017

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Articles Tagged With: Real Estate

what is mortgage insurance and how does it work?

FHA Mortgages For Multi-Unit Properties

A reader asked us a question this week in the comments section about FHA mortgages for properties with multiple units. “I want to buy a 6 residential unit apartment building with a very small store front commercial space on the property (computer repair shop that takes up about 15% of the property space) I plan on living in one of the apartment units. Is there an FHA loan out there for this situation?” FHA mortgages under the single family loan program do allow FHA loans to qualified borrowers for multi-unit properties. The rules for these purchases are found in HUD 4000.1, which states: “FHAs programs differ from one another primarily in terms of what types of Properties and financing are eligible. Except as otherwise stated in this SF Handbook, FHAs | more...

 
Mortgage Loan Rate Trends

Mortgage Loan Interest Rate Trends: Up And Down

In our last report we noted that mortgage loan interest rate numbers could be influenced by the substance of the most recent Fed announcement, or more specifically investor reaction to those details. Rates did try to creep lower ahead of Wednesday’s Fed event, and Wednesday morning it seemed like rates were trying to move lower still. But the Fed came and went, rates began to move higher, and according to our sources at the end of the day on Wednesday we were right back to where things were at before the pre-Fed downward movement. Which is to say that rates have been moving up and down within a certain range without any real major, breaking news-type dramatic shifts. 30-year fixed rate mortgage loan interest rate numbers are in a best | more...

 

Seller Contributions on FHA Loans

A reader asks a question about seller contributions on an FHA mortgage loan. “What is included in seller contributions with a max of 6%?” The question refers to something informally known as the “six percent rule” on FHA mortgages, which limits the contributions of an “interested party” to six percent of the sale price of the home. This rule is found on page 232 of HUD 4000.1, which defines both interested parties and their contributions to the sale as follows: “Interested Parties refer to sellers, real estate agents, builders, developers or other parties with an interest in the transaction. Interested Party Contribution refers to a payment by an Interested Party, or combination of parties, toward the Borrowers origination fees, other closing costs and discount points.” What are the FHA loan | more...

 
Mortgage Loan Rate Trends

Mortgage Rate Trends: Mostly Unchanged?

The most current mortgage rate trends put us in a curious place at the moment-there are small changes, there is movement in rates, but our sources say much depends on the lender (both conventional and non-conventional) and how that particular financial institution is reacting to the current rate environment. As we’ll explore in a moment, FHA mortgage rates are in a range that is fairly atypical, at least in terms of the size of that range. Conventional rates are solidly in the bottom four percent zone, but there are factors this week that have the potential to influence that. Specifically, there are scheduled economic data releases this week including today’s (Monday) morning release of construction spending an a national manufacturing index. There’s a scheduled ADP employment report due out mid-week, | more...

 

FHA Loan Amounts: A Reader Question

What are the minimum FHA loan amounts? A reader asked us a question in the comments section along those lines recently: “Is there a minimum amount for FHA Loans? Someone told me you have to borrow at least $90,000. Does the loan depend on your annual income?” FHA mortgages are not approved or denied based on the dollar amount of your annual income, but rather on your ability to afford the loan based on your financial obligations (including an estimate of your monthly mortgage payment) compared to your monthly income. Your debt-to-income ratio is more important in the loan approval equation. When it comes to FHA loan amounts, the minimum loan is based on the appraised value of the property or the asking price, whichever is lower. The FHA loan | more...

 

FHA Loans With A Non-Occupying Co-Borrower

How does having a non-occupying co-borrower affect your FHA mortgage? What happens if one of the borrowers decides they want a change in their status as occupying or non-occupying? A reader asked us a question along these lines recently in the comments section: “I just purchased my home in November 2016 with my husband’s uncle as a co-borrower (not living in the property). Now he is getting a divorce and his soon-to-be ex-wife wants the househe basically just helped me qualify of put the down payment to purchase and pay the mortgage on my ownhe even signed hes rights to the title the day we signed for the property is I was told. I could put in that paper after about 6 months of having the property but now I | more...

 

FHA Loan Rules For Part-Time Income

A reader asked us a question in the comments section this week about part-time income and how it may or may not qualify as verifiable income for an FHA loan. The reader asks: “My file is with the underwriter for review, they have asked for an VOE from my employer but they stated I work 16 hours a week (position hired into) but I always work more the 16 hr a week for the last 5-6 months and I’m going to continue to work more then that, they have already seen check stubs and both w2 from 2015 and 2016. Could this deny me for my loan?” We first have to determine what the FHA definition of part-time income. HUD 4000.1 gives lenders guidance in this area beginning with the | more...

 
FHA loan

FHA Loans For Non-Standard Properties

In a recent blog post we discussed FHA loan requirements for properties that had non-residential zoning or other non-standard features that could make it subject to local zoning laws or other ordinances. But what about properties that may be zoned residential, have all the usual characteristics of a residential property or typical home, but are still considered non-standard? FHA mortgage loan rules in HUD 4000.1 address such conditions. On page 498, in the section where appraisal rules are located, there is a section titled Non-Standard House Styles, which includes the following: Non-Standard House Style refers to unique Properties in the market area, including log houses, earth sheltered housing, dome houses, houses with lower than normal ceiling heights, and other houses that in the Appraisers professional opinion, are unique. Note that | more...

 
what is mortgage insurance and how does it work?

FHA Home Loans and Zoning: A Reader Question

How are FHA home loans affected by zoning laws? A reader asked a question about this in our comments section recently: “I have a family who wants to purchase a home on commercial zoned property. The County has given a letter stating that they would allow the rebuilding of the residence as long as less than 75% was damaged in a disaster. The lenders are refusing to allow an FHA residential loan for the property. It is clearly residential use in commercial zoning. Whey would they refuse to abide by the rules you state?” This question is in reference to a 2011 blog post titled, “Can I Get An FHA Loan For A Commercial Property?” The FHA loan rules quoted in that post have since been superseded in their entirety | more...

 

FHA Loan Rules For Employment: A Reader Question

FHA loan rules require the lender to verify a borrower’s employment-how long the borrower has been employed, the nature and duration of the job, the pay, and other factors that may be required by lender standards or state law. Sometimes it is easy to misunderstand these requirements, but many simply don’t know what the lender is looking for when verifying a borrower for an FHA mortgage loan. One reader got in touch with us to learn what the FHA loan rules are for employment, asking, “What is the required period of employment for FHA?” HUD 4000.1 provides the answer, stating: “For all Employment related Income, the Mortgagee must verify the Borrowers most recent two years of employment and income, and document using one of the following methods” which include “traditional” | more...