Articles Published in: August 2017

Refinancing a Second Home With An FHA Mortgage Loan

August 8, 2017

How Soon Can I Sell My Home After My FHA Loan Closes?

How soon can a borrower sell the home purchased with an FHA mortgage loan? The answer depends greatly on circumstances, but there are a few things to keep in mind. FHA home loans are intended for owner-occupiers, not investment property, so borrowers will need to keep that in mind when learning about the requirements and restrictions on an FHA mortgage in this area. In general, the FHA loan rules in this area are directed at the buyer’s side of the transaction. Owners are not prevented from offering property for sale, and FHA loan rules generally favor a home owner’s ability to freely sell property without restriction. But if you want to sell your property to someone looking to buy with certain types of mortgage loans backed by the government (like | more...

August 7, 2017

Which Credit Score Will My Lender Use For My Home Loan?

By Bruce Reichstein

Which credit score will my lender use for my home loan? There is understandably some confusion over this issue; there are three major credit reporting agencies, and multiple credit scores possible. How does your lender know which score(s) to use? When it comes to FHA mortgage loans, the FHA loan handbook has instructions for the lender on how to proceed when evaluating a borrower’s credit scores. One page 132 we learn: “The Minimum Decision Credit Score (MDCS) refers to the credit score reported on the Borrower’s credit report when all reported scores are the same. Where three differing scores are reported, the middle score is the MDCS. Where two differing scores are reported, the MDCS is the lowest score. Where only one score is reported, that score is the MDCS.” | more...

Are You In Trouble On Your FHA Mortgage Loan?

August 7, 2017

What Are The Differences Between FHA Mortgages And Conventional Loans?

By Joe Wallace

What are the differences between FHA loans and conventional mortgages? That’s a very good question, and one that has a multi-faceted answer. Borrowers could find that with careful planning, the amount of mortgage debt with an FHA mortgage is lower than with some conventional equivalents. The most basic difference between FHA mortgages and conventional home loans is that conventional loans are not backed in any way by the United States government, while FHA loans are guaranteed with government funds. This makes FHA loans easier to get since there is less risk to the lender. FHA loans differ from conventional loans in a variety of other ways, as we’ll examine here. Lower Interest Rates Interest rates on FHA mortgage loans are lower than conventional mortgages. You can easily verify this by | more...

August 4, 2017

Why Should I Refinance With An FHA Mortgage?

By Bruce Reichstein

Why should I refinance with an FHA mortgage loan? Many ask themselves this, and oftentimes the answer is good news; lower interest rates, the ability to refinance into a fixed rate loan from an adjustable rate mortgage, or lower mortgage payments. But there are also some FHA refi options for those who need to recover from natural disasters, or who want to rehab their property. Typical FHA Refinance Loan Options Borrowers with existing FHA mortgages have a full range of options including FHA Cash-out Refinance loans, FHA Streamline Refinance loans which can help with lower interest rates and mortgage payments, FHA no cash-out loans, and even reverse mortgages (for qualified borrowers aged 62 or older). Those with non-FHA mortgages may also refinance using cash-out or FHA no cash-out, options. You | more...

August 3, 2017

How Do FHA Loan Appraisals Work? Part Two

By Joe Wallace

FHA loan appraisals are a big part of the FHA loan approval process. Without the appraisal, your home loan application cannot move forward. The FHA appraiser compares the home you want to buy with an FHA loan to similar properties on the market and reviews the condition of the home to make sure it meets FHA minimum standards. Once the value of the home has been established, your lender can determine what your FHA loan amount should be, factoring in the amount your required down payment, plus the amount of any extras you choose to have financed into the loan (such as the Up Front Mortgage Insurance Premium). The FHA appraiser will visit the property-there is a requirement that the appraiser be physically present-to look at the home inside and | more...

Credit Scores For An FHA Home Loan: When Low Credit Is Not Bad Credit

August 3, 2017

How Do FHA Loan Appraisals Work?

By Bruce Reichstein

How do FHA loan appraisals work? This question is a vital one because some get the appraisal process confused with a home inspection and the two are not the same. The importance of an FHA appraisal in your loan process has to do with the lender getting information that helps calculate the fair market value of the home, while the home inspection gives the borrower information needed to make an informed purchase. FHA appraisals are governed by the rules in the FHA loan handbook, HUD 4000.1, which says the lender is required to, “order an appraisal from an Appraiser who is listed on the FHA Appraiser Roster and is qualified and knowledgeable in the specific market area in which the Property is located. The Mortgagee must evaluate the Appraiser’s education, | more...

Who can apply for FHA Reverse Mortgages?

August 2, 2017

Where Can I Apply For An FHA Loan? Part Two

By Joe Wallace

In our previous blog post about getting FHA loans, we discussed what a participating FHA lender is, and why you might not find the same types of FHA loans from lender to lender. Where can you apply for an FHA loan? Through a participating FHA lender who offers the type of home loan you need. But there’s more to this than just seeking and finding the right financial institution. Get Pre-Approved For An FHA Loan When you find an FHA lender who offers the type of loan you need (new purchase, construction loan, condo loan, etc.) be sure to ask about the pre-approval process and what it takes to get pre-approved. Doing so can help you a great deal-you’ll have a better idea about the rough amount of loan you | more...

August 2, 2017

Where Can I Apply For An FHA Loan?

By Bruce Reichstein

Where can I apply for an FHA loan? Borrowers who are at the start of their home loan journey might not realize that not all home loans are created equally, that not all types of mortgages are offered by lenders, or what it means to get pre-qualified for a mortgage. What you should know to start is that FHA mortgages are not the same as conventional home loans. That is why not all lenders offer FHA mortgages. The FHA home loan program has requirements which must be met in order to be an approved FHA lender. When you find a participating lender offering FHA mortgages, you should know that these lenders have taken steps to meet FHA requirements, standards, and have received plenty of guidance on what is acceptable under | more...

August 1, 2017

When Can I Refinance An FHA Loan? FHA Short Refinance

By Joe Wallace

In our last blog post, we discussed when a borrower is permitted to refinance a home loan using an FHA mortgage. But there’s one area not covered by the rules on refinancing with cash out or with no-cash out FHA refinancing. What about borrowers who are underwater on non-FHA mortgages, sitting in what in what is known by mortgage professionals as a “negative equity position”? Is there any help for these home owners? According to HUD 4000.1, the FHA loan handbook, there is a program called the FHA Short Refi, which “allows the Mortgagee to refinance a non FHA-insured Mortgage in which the Borrower is in a negative equity position”. That could be good news for some who badly need to get back on the road to building equity once | more...