Articles Published in: November 2016

November 22, 2016

FHA Appraisal Standards In 2017

If you are house hunting at the tail end of 2016 but don’t have a house selected yet, chances are good you’ll be very interested in learning about loan requirements and FHA appraisal standards for 2017. What does the FHA do on a yearly basis that can affect the appraisal process? After all, FHA loan limits for 2017 will be published soon, and the agency does do a review of market conditions in order to set and/or maintain those limits. What about appraisal rules? The truth is, FHA appraisals are a set of standards that basically get changed when they are required to because of new laws, changes in housing standards, or other factors. There is no need to revise FHA appraisal rules on a yearly basis; changes come when | more...

November 22, 2016

Mortgage Rate Trends: Pushing Higher

By Joe Wallace

Since our last report on mortgage rates, we’ve seen rates climb to highs not seen in well over a year. The markets that influence mortgage loan interest rates are reacting to economic uncertainty-specifically the unknowns related to fiscal policy for the incoming administration in Washington. Markets don’t like uncertainty, and current investor behavior is putting upward pressure on mortgage rates overall. 30-year fixed rate conventional mortgages are, at the time of this writing, reported at a best execution range between 4% and 4.125%. FHA mortgage rates are in their own best execution range between 3.75% and 4%. We haven’t seen rates break into the four percent zone in a very long time, and market watchers speculate that it will take a big dramatic shift to get back into the three | more...

How much can I borrow with an FHA refinance loan?

November 21, 2016

Getting An FHA Loan In 2017

By Joe Wallace

Are you considering an FHA loan in 2017? There are several things that can help you on your journey to home ownership in the new year. The first is knowing that the FHA updates its list of loan limits every year-at the time of this writing the FHA loan limits are not available yet for 2017, but new limits will go into effect on January 1, 2017. That means that some limits may change depending on the housing markets; sometimes low-cost and/or high-cost areas get an adjustment for the new year, other areas may also be affected depending on the state of the market. The FHA loan limits for each new year are adjusted based on averages for each individual market. From the FHA official site: “FHA publishes updated limits | more...

November 21, 2016

Occupancy, and First Time Home Buyers

By Bruce Reichstein

Do FHA loans favor first time borrowers? How do occupancy rules affect the FHA mortgage transaction? These issues are key in a recent reader question we answered in the comments section. A reader asks, ” I have never purchased a home and would like to purchase a Town House in Pompano Beach, FL located minutes from both of (family’s) places of employment and continue visiting with them as long as I like. We can share the mortgage cost and living expenses in Florida and I can keep the home that was gifted to me here in Detroit, MI. until it sells at a decent price. They will inherit all that I have and have invested in upon my demise so how can I qualify for an FHA first time buyer | more...

November 18, 2016

FHA Appraisal Rules: A Reader Question

By Joe Wallace

A reader asks, “Does the ‘no exposed wiring’ rule apply to an unfinished utility closet that has the furnace and water heater inside it? This is merely a smaller utility closet space that was never finished as it was never meant for any type of living area.” FHA loan appraisal rules in HUD 4000.1 include a set of instructions for the appraisal. Those instructions include a section that specifically addresses the electrical system of the home. In general this section tells the lender and appraiser about defective conditions which must be reported, including a variety of issues such as an electrical system that is not adequate to support the entire property. Those instructions also include the following: “The Appraiser must examine the electrical system to ensure that there is no | more...

November 17, 2016

FHA Loan Limits In 2017: The FHA Search Tool

By Joe Wallace

At the time of this writing, FHA loan limits for 2017 have not been published yet, but borrowers who need to know mortgage loan limits can look them up at the FHA official site. No matter whether you’re looking for loan limit information for the current year or for 2017, there is some important information to keep in mind. First, FHA loan limits in general are not uniform across the country. Loan limits vary depending on whether the market you’re buying in is considered a high-cost area or a market where costs are below national averages. When you are using the search tool on the FHA Mortgage Limits page on the FHA official site, you can look up the limits by state, county, or “Metropolitan Statistical Area”. Looking up multiple | more...

FHA One-Time Close Construction Loans In 2019

November 17, 2016

FHA Loan Rules: Deed-In-Lieu Of Foreclosure

By Joe Wallace

What are the FHA loan requirements for getting a new FHA loan after a deed-in-lieu of foreclosure? One reader got in touch with us recently to ask: “I completed a deed in lieu about three months ago. According to the government guidelines, how long do I have to wait before I can refinance or purchase a home?” The rules that govern FHA deed-in-lieu of foreclosure policy are found in HUD 4000.1, which state: “A Borrower is generally not eligible for a new FHA-insured Mortgage if the Borrower had a foreclosure or a DIL of foreclosure in the three-year period prior to the date of case number assignment. This three-year period begins on the date of the DIL or the date that the Borrower transferred ownership of the Property to the | more...

November 16, 2016

FHA Reverse Mortgage Counseling

By Joe Wallace

We addressed FHA reverse mortgages in a recent blog post, discussing several aspects of these home equity conversion mortgages. One thing that makes the FHA reverse mortgage program unique from FHA refinance loan options is that these types of loans (also known as FHA HECM loans) are only for qualified borrowers age 62 or older who own or almost own their homes outright. The FHA official site describes HECM loans as follows: “If you are a homeowner age 62 or older and have paid off your mortgage or paid down a considerable amount, and are currently living in the home, you may participate in FHA’s Home Equity Conversion Mortgage (HECM) program. The HECM is FHA’s reverse mortgage program that enables you to withdraw a portion of your home’s equity. You | more...

November 16, 2016

Mortgage Loan Interest Rate Trends: Sharply Higher

By Joe Wallace

Since the election, mortgage rates have been on the move, and this week has seen a sharp increase in rates that we haven’t experienced in some time. In fact, rates are the highest they’ve been all year. It’s unclear at this point whether this is a short term reaction to current events, or if this indicates a longer-term trend. 30-year fixed rate conventional mortgages did something they haven’t done in a very long time-they broke into the four percent range, with a best execution 4.0% for the most well-qualified borrowers. Rates have flirted with the bottom end of the four percent range in the recent past, but managed to stay below four percent for a very respectable length of time. FHA mortgage loan interest rates are now at a best-execution | more...

November 15, 2016

FHA Refinance Loans and HECM Reverse Mortgages

By Joe Wallace

There are two types of FHA loans borrowers should know about when considering their refinance loan options. One is a traditional cash-out or no cash out refinance loan, the other is a reverse mortgage also known as an FHA HECM loan. HECM stands for Home Equity Conversion Mortgage. The standard refinance loan and FHA HECM options are very different and serve different needs, but depending on the borrower it may be good to be familiar with both. Typical FHA refinance loans involve situations where the borrower typically has an existing mortgage and applies for a new loan that pays off the original mortgage, creating a brand new monthly payment, loan term, etc. Depending on the terms of the loan cash back may or may not happen, but for cash-out refinancing | more...