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Articles Published in: November 2010

FHA Reverse Mortgage

FHA ARM Loan Basics

The FHA offers an adjustable rate mortgage, also known as an FHA ARM loan. These loans offer an introductory interest rate which is subject to change after the initial fixed rate period. That period varies depending on the loan--there are hybrid ARM loans available that feature different periods--but once the introductory rate period has elapsed, the adjustable rate is subject to a cap that applies either year-to-year or over the lifetime of the FHA loan. The initial interest rate is often lower than the fixed rate of conventional home loans, which is why many people consider ARM loans even in spite of the fears generated by the housing crisis of 2008.

 

FHA Adjustable Rate Mortgages

There are two basic types of mortgages new house hunters should know about when shopping for FHA home loans; fixed rate FHA mortgages and Adjustable Rate Mortgages or FHA ARM loans. The FHA Adjustable Rate Mortgage is exactly what its name implies--an FHA home loan with an interest rate that can be adjusted up or down according to FHA requirements, the market and other factors. Thanks to the 2008 housing crisis, many soon-to-be homeowners are skeptical about adjustable rate mortgages whether offered by the FHA or not; FHA adjustable rate terms are definitely more predictable in some ways than their conventional loan counterparts. One of the reasons for that predictability is the ARM interest rate adjustment cap imposed on the loan. The cap protects the buyer from large swings in | more...

 

Do I Qualify for an FHA Short Refinancing Loan?

In 2010, the FHA made changes to its refinance program to let borrowers who owe more on conventional home loans apply for something commonly known as the FHA Short Refinance program. These FHA refinancing loans are an important option for borrowers who find themselves in difficult financial situations and know they can't avoid foreclosure by selling the home. An FHA Short Refinancing loan makes a lot of sense for borrowers in this position. But what does it take to qualify for the loan?

 

What are FHA Minimum Property Standards?

As with most government home loans, the mortgages guaranteed by the FHA have minimum property standards which must be met before the FHA will approve the loan. But taken at face value, that statement would lead some to believe the FHA maintains a set of building codes that a home must meet above and beyond (or at least separate from) state and local codes. That was true once upon a time--until the mid 1980s, the FHA did have its own codes for different types of buildings.

 

Can I Get an FHA Loan Even Though I

Conventional loans can be unforgiving when it comes to credit scores, credit history, bankruptcy and foreclosure. In the current housing market, credit requirements on conventional loans are tougher than ever. One of the reasons government home loans are so popular is because FHA guaranteed loans are more lenient and flexible where credit is concerned. The FHA even allows applicants to re-establish credit with an FHA loan even if they have previously declared bankruptcy or had a foreclosure. There are strict rules that cover these situations, but for those who qualify, the FHA mortgage is an excellent way to start over, reestablish credit and become a homeowner once more.

 

Can I Get an FHA Loan Even Though I

Conventional loans can be unforgiving when it comes to credit scores, credit history, bankruptcy and foreclosure. In the current housing market, credit requirements on conventional loans are tougher than ever. One of the reasons government home loans are so popular is because FHA guaranteed loans are more lenient and flexible where credit is concerned. The FHA even allows applicants to re-establish credit with an FHA loan even if they have previously declared bankruptcy or had a foreclosure. There are strict rules that cover these situations, but for those who qualify, the FHA mortgage is an excellent way to start over, reestablish credit and become a homeowner once more.

 

Can I Get an FHA Loan Even Though I’ve had a Foreclosure or Declared Bankruptcy?

Conventional loans can be unforgiving when it comes to credit scores, credit history, bankruptcy and foreclosure. In the current housing market, credit requirements on conventional loans are tougher than ever. One of the reasons government home loans are so popular is because FHA guaranteed loans are more lenient and flexible where credit is concerned. The FHA even allows applicants to re-establish credit with an FHA loan even if they have previously declared bankruptcy or had a foreclosure. There are strict rules that cover these situations, but for those who qualify, the FHA mortgage is an excellent way to start over, reestablish credit and become a homeowner once more.

 

Are FHA Loans Assumable?

An FHA loan assumption is a situation where a new FHA borrower takes over or assumes the debt on an existing FHA home loan started by another borrower. According to the FHA official site, the specific definition of an FHA loan assumption reads, "Assumption of an FHA-insured mortgage is a servicing function where the responsibility of the mortgage is acquired by another person through either Simple or Creditworthiness process." Those two options, "simple" and "creditworthiness" can be confusing to new borrowers at first, but these two terms are simple to understand. If an FHA borrower wants to assume an FHA mortgage originated December 1, 1986 or earlier, the "simple" process is used. This means the loan can be assumed without prior approval from the FHA.

 

How to Avoid Foreclosure on FHA Loans

In tough economic times, many home owners struggle to keep up with their mortgage payments. The first time an FHA borrower misses a mortgage payment, the collection agencies won't come knocking on the door, but that first missed payment is a slippery slope that leads toward FHA mortgage default and eventually foreclosure. There are many programs designed to help keep a buyer in their home, but those who act quickly may not even need the most recent Obama mortgage program or government home loan bailout plan. The FHA advises borrowers to get in touch with a HUD-approved counseling agency the moment it's clear the borrower will have trouble making the next mortgage payment on time. FHA loan counseling is available at 1-800-569-4287 or TDD: 1-800-483-2209.

 

How Much is the FHA Debt-to-Income Ratio?

The FHA has a maximum debt to income ratio set for FHA loans. When a borrower applies for an FHA mortgage, they must list all debts and lines of credit in detail as well as all possible approved income sources. With this information, the lender and FHA can calculate what a borrower's debt picture is and issue a percentage of debt to the amount of income listed. For FHA home loans, the rules are clearly spelled out. According to the FHA official site, "The FHA allows you to use 29% of your income towards housing costs and 41% towards housing expenses and other long-term debt."