Articles Published in: October 2018

October 12, 2018

Protect Yourself When Shopping For A New Home

A recently published report about home loans and credit checks advises, “Do not allow a credit pull by a lender you don’t know, especially if the offer is unsolicited”. This advice leads to a few other questions about the home loan process; how do you protect yourself against identity theft, fraud, scams, and unscrupulous vendors when you are trying to buy a home with an FHA mortgage? Consider Your Recent Activities When Shopping For A Home Loan What does this mean? When you want to buy a home with an FHA mortgage or any other kind of loan, consider that you may be signing up for accounts on real estate sites or other online resources and that you don’t always know what might become of your personal data with third | more...

October 11, 2018

FHA Loan Rules For Presidentially-Declared Major Disaster Areas

By Bruce Reichstein

In September of 2018, the FHA and HUD issued a reminder to lenders and FHA loan servicers regarding official policy for dealing with loans in presidentially-declared major disaster areas. A document labelled FHA INFO #18-40 states that for both forward loans and FHA reverse mortgage loans, certain guidance applies once the federal disaster area declaration has been made. The guidance begins with a definition of the disaster area declaration, explaining that it is made when “natural or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond”. When this is invoked by the president, FHA loan guidance to participating lenders includes the following: FHA Loan Foreclosure Moratorium FHA loan rules include a 90-day moratorium on foreclosures following the declaration of | more...

October 10, 2018

Four Reasons You Need A Home Inspection After The FHA Appraisal

By Joe Wallace

There are four good reasons why you need a home inspection as well as an FHA appraisal on the home you want to buy with an FHA mortgage. Some FHA loan applicants are tempted to sign on the dotted line based on the results of the FHA appraisal alone. Is this a good idea? No. Why not? If it’s good enough for the FHA, why isn’t it good enough for the borrower to accept the appraisal results and take it on faith that the home is exactly as it appears? #4: Get A Home Inspection Because The Appraisal Is Not Intended For The Borrower, It’s A Tool For The Lender The appraisal process is meant only to establish the home’s fair market value and determine that the home meets minimum | more...

October 9, 2018

FHA One-Time Close Construction Loans In 2019

By Bruce Reichstein

Why should borrowers consider applying for an FHA One-Time Close (OTC) Construction Loan to build a home in 2019? There are several reasons why having a home built for you from the ground up rather than purchasing an existing construction property might be appealing. FHA One-Time Close mortgages are construction loans that have a single application and closing date; they require the use of escrow and the borrower can either purchase land to build on or use the land already owned. What are the motivations for using an FHA OTC? FHA One-Time Close Construction Loans have lower down payment guidelines, equity in the land owned could be used toward the FHA down payment requirement where applicable, and the borrower makes no mortgage payments during the construction phase of the loan. | more...

October 8, 2018

Can I Buy A Rental Property With An FHA Mortgage?

By Joe Wallace

Can I buy a rental property with an FHA mortgage? This is a question borrowers ask when they are considering trying to use the property they buy with their new mortgage to earn income or even help pay the mortgage itself. Is this possible under FHA home loan rules? FHA Mortgage Loan Rules: You Must Occupy The Property You Purchase With An FHA Mortgage Most FHA single family home loans include an occupancy requirement, which means if you intend to rent a property you purchase with an FHA loan, it must be a single-unit or multi-unit home that you intend to occupy. FHA loans technically permit mortgages for properties with up to four living units. Your participating FHA lender may or may not offer home loans for multi-unit properties, so | more...

October 5, 2018

Five Credit Areas That Affect FHA Loan Approval

By Joe Wallace

There are many areas that can affect the lender’s decision to approve or deny an FHA home loan application. Do you know what these important issues mean and how they can affect millennial home buyers or anyone else examining their affordable housing needs? #5 FHA Home Loan Approval And Your FICO Scores Your FICO score may be well within the FHA minimums for loan approval or even maximum financing, but do you know what the participating FHA lender’s FICO score requirements might be above the FHA minimum? You may find that the FHA loan program’s minimum 580 FICO score for the lowest possible down payment is lower than the FHA lender’s requirements. Check with the lender to see what is required in this area for a better idea of what | more...

October 4, 2018

Are You Ready To Fill Out FHA Home Loan Paperwork?

By Bruce Reichstein

Are you ready to fill out FHA home loan paperwork and start the loan application process? Here are some important things you should think about before getting the forms and starting the loan. Get Ready For An FHA Mortgage Loan By Reducing Your Debt Ratios FHA home loans, like other mortgages, require the borrower to be able to realistically afford the mortgage. If you don’t know how much debt you have going out compared to how much income you have-hypothetical mortgage payments included-you aren’t ready to fill out home loan paperwork. You will need to know what the lender will see when examining your debts and income, and know how much of your income is taken up by your monthly financial obligations. Knowing Your FICO Scores Ahead Of Your FHA | more...

October 3, 2018

FHA Home Loan Mortgage Rates And Home Loan Planning

By Joe Wallace

What do new borrowers need to know about FHA home loan interest rates? When you are in the planning stages of your mortgage loan you might not know where to start first, but knowing a few important facts about mortgage loan interest rates can be a huge help. FHA Loan Interest Rates Are Not Regulated By The FHA The FHA and HUD do not set interest rates on FHA mortgages or FHA refinance loans. The rates offered to you by your chosen participating lender will be set according to the current market plus variables such as your credit scores. It’s best to shop around for a lender to find the most competitive interest rate. FHA Home Loan Interest Rates Are Subject To Change Mortgage rates change daily. There are several | more...

October 2, 2018

FHA Loan Applications And Your Credit Report

By Bruce Reichstein

When you apply for an FHA mortgage, your lender is required to check your FICO scores and credit history. But do you know what the lender must gather to determine whether or not to approve your mortgage loan? This process is a mystery to some home buyers and knowing what’s involved can help you plan for your mortgage loan long before you ever contact a lender. FHA Loan Requirements For Checking Credit Scores And Credit History The rules that govern this process are found in HUD 4000.1, the FHA Single-Family Loan handbook. It instructs the lender to use a traditional credit report whenever possible-some borrowers may have little to no credit history and a non-traditional credit report may be needed. But in cases where the lender is able to obtain | more...

October 1, 2018

What Is A Home Loan Seasoning Period And Does This Affect My FHA Mortgage Application?

By Joe Wallace

What is a seasoning period and how does it affect an FHA mortgage loan? Simply put, the seasoning period is a required amount of time a borrower may be required to wait before even being allowed to apply for a new loan. Who does the seasoning period concept affect and why? What are the FHA home loan rules for these periods and when are they applicable? FHA Loan Seasoning Periods: The Basics A seasoning period on an FHA mortgage may be applicable for a new purchase loan in some cases, and refinance loans in others. For new purchase FHA home loans, the seasoning period applies most often to those who have had a negative credit event such as a bankruptcy or foreclosure. Bankruptcies and foreclosures require the borrower to wait | more...