December 4, 2021

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Articles Published in: May 2018

FHA Loan

VA One-Time Close Construction Loans Compared To FHA One-Time Close Loans

How do VA One-Time Close / Single-Close construction loans compare to their FHA One-Time Close (OTC) / Single-Close counterparts? If you don’t know which program you qualify for, now is a good time to learn the differences and similarities. FHA And VA One-Time Close / Single-Close Construction Loans Requirements Some things will apply to both FHA and VA One-Time Close construction loans. For both types of loan, all borrowers must financially qualify, they must have minimum FICO scores as determined by both the VA/FHA and the lender, and the property must be constructed in the United States or its’ protectorates. VA One-Time Close and FHA One-Time Close loan rules both require occupancy; you may only have a home built from scratch using a VA construction loan if you intend to | more...

Refinance loans: is it time to commit?

FHA 203(k) Rehab Loans: What’s A Contingency Reserve?

If you are interested in buying or refinancing a home to renovate with an FHA mortgage, the FHA 203(k) loan is a great place to start exploring your options. The FHA 203(k) rehab loan comes in two varieties-one for larger and more ambitious projects, and a smaller “limited” 203(k) that offers smaller loans for simpler repairs/renovations. The 203(k) loan involves hiring contractors and having work done according to both FHA home loan minimum standards, but also requires that the home be brought into compliance with applicable building codes. Lender standards, state law, and FHA home loan rules will affect how this transaction is conducted. One FHA requirement is the FHA rehab loan contingency reserve, which you can think of as a “rainy day fund” in case there are unexpected costs | more...

FHA One Time Close Construction Loan Option

FHA One-Time Close Construction Loans: Location Matters

Location matters when you are applying for an FHA One-Time Close / Single-Close construction loan. These mortgages are for borrowers who don’t want to purchase an existing property but want a home built for them from the ground up, but FHA One-Time Close construction loans, (FHA OTC) do have some restrictions on where a home can be constructed. These restrictions aren’t as difficult to understand as you might think; FHA loan officers are required to insure the home as an economic and functional life that will last the duration of the mortgage. Part of that due diligence is making sure the home is capable of withstanding environmental conditions and/or not being put directly in harm’s way due to know problems. That’s one reason why the FHA loan rules for home | more...

First Time Home Buyers: Improve Your Credit With Credit Monitoring

FHA Mortgage Credit Issues

FHA mortgage loans require a credit check, but many future FHA borrowers have some kind of credit issue in their past. Some things aren’t enough to derail an FHA home loan application-old credit issues that have since been resolved, disputed accounts that have since been successfully resolved or have had a payment plan created, etc. What do borrowers need to know about credit issues that CAN negatively affect the ability to borrow? For starters, it’s important to know that the most recent 12 months of your credit activity will be very important. It’s crucial to avoid late and missed payments at all costs in those 12 months for best results. Other FHA loan credit issues can affect your loan (or not) depending on the timing, severity, and nature of the | more...

FHA rehab loans

Can I Do My Own Contracting Work With An FHA One-Time Close Construction Loan?

When applying for an FHA One-Time Close / Single-Close construction loan to have a house built from the ground up, some borrowers want to know if the FHA construction loan program will permit the borrower to act as her own contractor. FHA loan rules found in HUD 4000.1 would seem to make this question fairly easy to answer, but look beyond this quote from the FHA home loan rulebook-this isn’t the only rule that governs the FHA construction loan process: “The Borrower must have contracted with a builder to construct the improvements. The builder must be a licensed general contractor. The Borrower may act as the general contractor, only if the Borrower is also a licensed general contractor.” That is what is found in HUD 4000.1, page 445 under the | more...

Buying a House

Why Do People Refinance Home Loans?

Why do people refinance home loans? The answers are diverse since there is more than one reason to refinance AND more than one application for an FHA refi loan. Refinancing To Get Lower Monthly Payments One powerful motivation to refinance is to get a lower mortgage payment each month. Existing FHA mortgages can be refinanced into FHA Streamline Refinancing mortgages, which feature no FHA-required new credit check or appraisal. Your lender may require a credit check and/or appraisal if lender requirements or circumstances warrant. Some Streamline Refinance loans have to include a new credit check if the borrower chooses add-ons to the loan that increase monthly payments over a certain threshold. FHA Streamline Refinance loans must generally result in a tangible benefit to the borrower including a lower payment. Non-FHA | more...