Articles Published in: September 2016

what is mortgage insurance and how does it work?

September 6, 2016

FHA Loan Questions: Chapter 13 Bankruptcy

Here’s a good example of the type of question we are commonly asked about credit history issues and FHA home loans: “I had my chapter 13 dismissed and continue to pay and rebuild my credit. It has been 6 months and I plan to buy a home within the next 6months. Will qualify to buy a home with an FHA loan?” FHA loan rules in HUD 4000.1 address bankruptcy issues, and the rules can vary depending on the type of bankruptcy. In general (we’ll look at specific FHA loan rules in a moment) you can expect to wait a minimum of 12 months with any type of bankruptcy under FHA loan minimum standards. We emphasize “FHA standards” here because additional lender standards can and often do apply. The FHA minimum | more...

September 6, 2016

Mortgage Loan Interest Rate Trends: Slightly Higher After Friday Jobs Report

By Joe Wallace

Ahead of the holiday weekend, all eyes were on Friday’s employment stats, which can and have acted as a spoiler for mortgage loan interest rates in the past depending on investor reaction to the contents of such reports. Market watchers reported weaker-than-expected numbers in that report, and ahead of a holiday weekend we saw some lenders keeping rates the same, while others had slightly higher numbers to close out the week. 30-year fixed rate conventional mortgages were reported at or near a best execution range between 3.375% and 3.5%. Friday’s increases with some lenders were likely reflected in closing costs rather than actual higher rates. FHA mortgage loan rates continue holding fast in their best execution range between 3.0% and 3.5%. The numbers we’ve been seeing are reported by industry | more...

September 5, 2016

Happy Labor Day 2016!

By Joe Wallace

Happy Labor Day 2016! Our regularly scheduled blog posts and answers to reader questions will return tomorrow. Thanks for reading!

September 2, 2016

Foreclosure Avoidance on FHA Mortgages: The Trial Payment Plan

By Joe Wallace

The FHA recently announced changes to its policies designed to help those who purchased homes with FHA mortgages and have since fallen into financial trouble to avoid foreclosure. There are many government programs to help borrowers keep their homes in hard times including the Obama mortgage, and the FHA Home Affordable Modification Program or HAMP. If you have fallen behind on your mortgage payments on an FHA mortgage, the information here will be of special interest to you. Those who are under consideration for HAMP may learn they have to complete a trial payment plan before the HAMP modification can be finalized and approved. But what does this trial payment plan (also referred to as TPP) entail? The FHA announced modifications to the HAMP program this summer, and in FHA | more...

September 1, 2016

FHA Loan Reader Questions: Judgments and Loan Approval

By Joe Wallace

A reader asks, “I have a judgment for a car that was repossessed in May 2010. It was a car purchased by my husband with myself as cosigner. I didnt plan on paying it off as we are waiting on a divorce and he has no plans to help pay it off. Will I be able to get a FHA mortgage with this lingering on my credit? I do have credit scores in the 650 range and higher.” Community property laws in a given state, where applicable, may affect the answer to this question, but in general, FHA loan rules in HUD 4000.1 state that judgments on a borrower’s credit history must have some kind of resolution. On pages 177 and 178 of HUD 4000.1 we learn a great deal | more...

September 1, 2016

FHA Home Loans: General Rules

By Joe Wallace

FHA home loans are unique compared to conventional loans due to the lower down payment and more forgiving credit requirements. There are some basic rules governing FHA mortgage loans you should know about going into the process; keeping these in mind will save time and help you better prepare for the loan. One of the key issues for FHA mortgages is the location of the home. According to HUD 4000.1, “The Property must be located within the U.S., Puerto Rico, Guam, the Virgin Islands, the Commonwealth of the Northern Mariana Islands, or American Samoa.” That’s a very basic requirement, but FHA loan rules do get more specific from there. A property must be situated in a reasonable owner-friendly location. For example: “The Mortgagee must determine if a Property is located | more...