Articles Published in: June 2015

When Is An FHA Loan Better Than A Conventional Loan?

June 5, 2015

FHA Home Loan Refinancing: What You Should Know Before You Apply

FHA refinancing loans give borrowers many options. Did you know that you do not need to have an existing FHA mortgage loan to take advantage of certain FHA refinance options on your loan? You can change lenders, change the nature of your loan from an adjustable rate to a fixed rate, and add energy-efficient improvements to the loan amount. FHA cash out refinance loans permit non-FHA borrowers to apply for refinance loans on conventional loans. You can refinance your existing FHA or non-FHA mortgage from a fixed rate to a new fixed rate loan, fixed rate to adjustable rate, adjustable rate to adjustable rate, etc. Cash out refinance loans always require a new appraisal, even if your current appraisal is still current. FHA loan rules say you cannot use an | more...

June 5, 2015

FHA Home Loan Rules For Foreign Nationals

By Joe Wallace

FHA home loan rules include guidance for participating lenders who are handling FHA loan applications submitted by non-U.S. citizens. Did you know that according to FHA loan rules, it is not required to be a U.S. citizen in order to apply? However, certain restrictions do apply. According to HUD 4155.1 Chapter Four, Section A, “U.S. citizenship is not required for mortgage eligibility”. However, all applicants must have a valid Social Security Numberr (SSN). That is according to the FHA/HUD official site FAQ section, which states: “For all borrowers, including US citizens, the lender is required to document a valid Social Security Number (SSN) for each borrower, co-borrower, and co-signer on the mortgage. All individuals eligible for legal employment in the US must have a SSN. Each borrower must provide the | more...

June 5, 2015

FHA Mortgage Rate Trends: Slightly Better

By Joe Wallace

Mortgage loan rates pushed into year-long highs recently and we’re monitoring headlines for important developments like the scheduled jobs report that’s due out on Friday with potential to help or hurt mortgage rates depending on both the contents of that report and investor reaction to it. Yesterday we reported best execution mortgage loan rates for 30-year fixed rate conventional loans having broken the 4.0% barrier after spending a great deal of time earlier this year at sub-four percent rates. Going into the low fours seems like a dramatic move higher, but compared to rates in years past, these numbers are still low…but the upward pressure makes those who have gotten used to seeing those best execution rates below four percent a bit nervous. There is much anticipation of the jobs | more...

Can I buy a manufactured home with an FHA loan?

June 4, 2015

FHA Loan Credit Score Requirements: A Commonly Asked Question

By Joe Wallace

One common theme we find when fielding some questions about FHA home loans involves FICO score requirements. It’s true that FHA mortgage loan FICO score minimums are often lower than the requirements of some participating FHA lenders, but some borrowers get confused about FHA loan FICO score requirements in general–never mind what minimum number the FHA might accept versus what the lender might accept. One variation on a commonly asked FHA loan question goes something like this: “Does your actual FICO score matter as much as the details of your credit report? It sounds like the number on your FICO score isn’t that crucial compared to your credit history in the last 12 months leading up to the loan.” The idea that your FICO score itself “doesn’t count” as much | more...

June 4, 2015

FHA Mortgage Loan Interest Rate Trends: Moving Higher

By Joe Wallace

Since our last report, we’ve seen mortgage loan rates moving higher due at least in part to overseas economic headlines that have put pressure on rates here at home.We’ve been reporting on European Central Bank headlines making investors at home behave in ways that have been pressuring rates higher. The European version of Quantitative Easing or QE (news of which had been a major factor in adjustments in mortgage loan rates when it was being done stateside in years past) has helped to add some volatility to the mortgage loan rate situation here at home. Wednesday was no exception–A European Central Bank press conference did nothing to ease the upward pressure. Some reported waffling in that press conference on the nature of QE and under what conditions it might come | more...

June 3, 2015

The FHA Appraisal Process–How Does The Lender Choose Your Appraiser?

By Joe Wallace

The FHA appraisal process is different than the home inspection process. For example, the home inspection is an optional but strongly recommended part of the home buying journey that the borrower is responsible for. You should never purchase a home without hiring a home inspector to review the property. An FHA appraisal–the mandatory, but not exhaustive review of the home–is carried out an an FHA appraiser. This appraiser, according to HUD 4155.2 Chapter Four, is hired as a third party by the lender. Did you know there are FHA loan rules that guide the lender in how an FHA appraiser is to be chosen? According to Chapter Four, the lender must recognize that not all appraisers are equal in skill or experience. “An appraiser who is primarily experienced in appraising | more...

June 3, 2015

Initial Steps to Your FHA Home Loan

By Joe Wallace

There are many steps to purchasing a home with an FHA mortgage loan. House hunters don’t normally begin this process by picking up the real estate listings or exploring them online; house hunting is a process that should begin at least a year in advance of buying the home with an FHA loan with financial planning. Getting Your Finances Ready For An FHA Loan Preparing for your loan application a year in advance is strongly recommended. You’ll need to check your credit scores and make sure you bring a minimum of 12 months worth of on-time payments on all your financial obligations to the application process. Doing anything less can hurt your chances for loan approval. It’s important to remember that your lender will check the amount of debt against | more...

What happens to my FHA loan in a natural disaster?

June 2, 2015

The Purpose of the FHA Appraisal For An FHA Home Loan

By Joe Wallace

When you want to buy a home with an FHA mortgage loan, the appraisal process is an important step towards getting the loan approved. The lender is required to determine the loan amount based on the lesser of the appraised value or the sales price of the property. And while borrowers should not confuse the required FHA appraisal with the optional, but still crucial home inspection process, it’s important to know how the FHA defines and views the appraisal in the home loan process. FHA loan rules for appraisals are currently found in HUD 4155.2, Chapter Four. In that chapter, under a heading titled “Purpose of a Property Valuation”, we find the following: The purpose of the property valuation process is to: –determine eligibility for mortgage insurance based on the | more...

June 2, 2015

FHA Occupancy Requirements

By Bruce Reichstein

One common type of question we are often asked about FHA loan occupancy rules involves situations where the borrower wants to purchase the home for his or her primary residence, but may be gone for extended periods of time because of job-related travel. Some borrowers want to know if the FHA loan rules on occupancy specify a number of calendar days per year of occupancy, or if a spouse and children can fulfill the borrower’s occupancy requirement in his/her absence. FHA loan rules found in HUD 4155.1 Chapter Four Section B simply states, “A principal residence is a property that will be occupied by the borrower for the majority of the calendar year.” It may be at the lender’s discretion to determine what the minimum occupancy for the borrower might | more...

June 1, 2015

FHA Loan Rule Changes and The New Single Family FHA Policy Handbook

By Joe Wallace

The FHA announced important changes to its single family home loan program for 2015–a new Single Family FHA Policy Handbook that would essentially be the go-to guide for all rules and regulations for a typical FHA home loan. The new handbook was supposed to go into effect in mid-June and take precedence over the old collection of policies. But the FHA and HUD have extended the deadline for this new handbook to go into effect and now existing guidance will be valid through September 14, 2015. According to the FHA official site, “As of May, 18, 2015 users can access the online SF Handbook for free from the link provided on HUDs Client Information Policy Systems (HUDCLIPS) web page. The online SF Handbook makes it easier for mortgagees and other | more...