Articles Published in: August 2019

August 15, 2019

FHA Announces New Condo Loan Rules

The Federal Housing Administration has announced changes to its’ condo approval policies that could make it easier for house hunters to find and purchase condo units with an FHA mortgage. The changes are intended to increase lender flexibility and to adapt to changing conditions in the housing market. The FHA and HUD issued a press release on the new rules which states that the new rules …“will allow certain individual condominium units to be eligible for FHA mortgage insurance even if the condominium project is not FHA approved.” Under the old rules, a condo project had to be on the FHA approved list or added to it. As of October 15, 2019, the new FHA policies will, according to the FHA official site, include the following changes to FHA condo | more...

August 14, 2019

FHA Home Loans: A Q&A

By Joe Wallace

Q: What Kind Of Home Can I Buy With An FHA Mortgage? A: You can purchase a single-family home with as many as four living units. FHA home loans can be used to buy condos, mobile homes, town houses, mixed-use properties that are primarily residential (the borrower must live in the property), and manufactured homes. Q: Is Private Mortgage Insurance Required For FHA Mortgages? A: Private mortgage insurance is not required, but FHA borrowers will be required to pay a Mortgage Insurance Premium and an Up-Front Mortgage Insurance Premium (UFMIP) as a part of the mortgage. The UFMIP is paid up front or financed in its’ entirety into the loan amount. The mortgage insurance premium each month is part of the borrower’s monthly payment. Q: Can I Buy A Home | more...

August 13, 2019

FHA Loan Rules For Second Residences

By Bruce Reichstein

One thing you will read often about FHA single-family home loans? They are only intended for owner-occupied residences. So why do some borrowers hear of some homeowners being approved for FHA loans for a second house? There is a provision in HUD 4000.1 that allows an FHA mortgage for a “second” primary residence, as well as a provision for what the FHA and HUD term “secondary residences” under certain conditions. The FHA loan rules say secondary residences are defined as follows: “Secondary Residence refers to a dwelling that a Borrower occupies in addition to their Principal Residence, but less than a majority of the calendar year. A Secondary Residence does not include a Vacation Home. “ FHA loan approval may be possible for a secondary residence when the following applies: | more...

August 12, 2019

Why Consider An FHA 203k Rehab Loan

By Joe Wallace

Why consider a 203k FHA Rehab Loan for buying or refinancing a property that needs repairs? For some the answer is simple. Some house hunters may be looking for a project home to customize. Others may be home owners who want to refinance to make upgrades and renovations to the home. The FHA 203k Rehab Loan and Refinance Loan option is a good one to explore. Some are tempted to make home improvements with a credit card rather than a mortgage or refinance loan; this might work for those who already own the home, but it’s important to compare the costs of financing such projects versus putting them on a credit card. Anyone who is house hunting and finds a property they like but won’t meet building code and/or minimum | more...

August 9, 2019

Four Things to Remember About Home Loans and Credit Scores

By Bruce Reichstein

There are four things to remember about home loans and credit scores, especially for first-time home buyers looking to buy their first piece of real estate. FHA home loan rules are more forgiving when it comes to credit scores, but there are still minimum standards and requirements to meet. Keep these four things in mind when planning your home loan application for best results. Credit Utilization And Payment History Are Both Very Important How much of your credit limit do you use? This is a question the lender needs to answer because how you use credit is just as important as all the other factors that go into home loan approval. Carrying high credit card balances can hurt your chances for home loan approval-try to keep your balances below the | more...

August 8, 2019

Home Buying, FHA Loans, And Mortgage Trends

By Joe Wallace

Is 2019 the best time to consider buying a home? Recent mortgage loan interest rate trends and the news agencies that report on them seem to indicate that conditions are very good for first-time home buyers looking to purchase a home in the remainder of the year. One indication? Headlines during the week of August 4, 2019 that included phrases like, “Lowest Rates Since November 2016”. And then there are reports by agencies that monitor house prices in the United States. Consider the First American Real House Price Index (RHPI), which tracks the prices of single-family homes and the effects of factors like changes in mortgage loan interest rates on consumer borrowing power. The May 2019 report by First American includes this quote: “Consumer house-buying power, how much one can | more...

August 7, 2019

Four Questions About FHA Home Loans

By Bruce Reichstein

FHA home loans, like any other mortgage loan transaction, can seem complicated at first. Especially for first-time home buyers who have never applied for a mortgage before. What questions should you ask your lender about this process before you fill out loan paperwork? FHA Home Loan Questions To Ask Your Lender: What Interest Rates Are Available To Me? FHA loan interest rates are determined by several factors, one of which being your credit score. Your lender will need to know your credit score or approximate credit score to give you an idea of the interest rates available to you, so make sure you bring that information to the lender before you ask. FHA Home Loan Questions: What’s The FHA Loan Limit For The Housing Market You Want To Buy Your | more...

August 6, 2019

HUD Announces Important Change To FHA Cash-Out Refinance Loan Program

By Joe Wallace

The Department of Housing and Urban Development has issued a mortgagee letter announcing a major change to the FHA Cash-Out Refinance Loan program. Effective September 1, 2019, the loan-to-value ratio for FHA cash-out loans is reduced from 85% to 80%. All FHA cash-out refi loans with FHA case numbers issued on or after 1 September 2019 will have the lower LTV. This has the effect of reducing the amount of cash back to the borrower on the transaction. The HUD press release states that the reduction is intended to protect against weaknesses in the housing market, and cash-out refinance loan defaults. The FHA has experienced an overall increase in cash-out loans as high as 250 percent according to HUD. In light of that statistic and other data, the FHA concluded | more...

the importance of credit for home loan approval

August 5, 2019

FHA Home Loans And Perfect Credit: Fact Versus Fiction

By Bruce Reichstein

We get plenty of reader questions about FHA home loans. Many of those questions have to do with worries that a borrower won’t qualify for the loan. One of the biggest topics in this area? “Can I get an FHA Home loan without perfect credit?” We fielded a question like that recently-the term “perfect credit” was used. The reader seemed to assume that perfect credit is required in order to buy a home. But who do you know as a homeowner with perfect credit? The truth is, FHA home loans do NOT require perfect credit for loan approval. But many potential home owners don’t understand how the credit check process works, or the requirements for loan approval. So it’s easy to understand how people can assume wrong things about the | more...

August 2, 2019

5 Uses For An FHA Mortgage Loan

By Joe Wallace

There are five good uses for an FHA home loan you should know about, especially if you are a first-time home buyer with no experience in applying for mortgage loans. The right kind of loan awaits you, but first it’s important to determine what the right loan for you might be based on your financial needs and goals. 5. Buy An Existing Home With An FHA Mortgage You can use an FHA mortgage to buy existing construction houses as long as they meet FHA minimum standards and local building code, are primarily residential in nature, and you plan to occupy the property as your home. These homes can be condo units, mobile homes, town homes, multi-unit properties (as many as four living units), or manufactured homes. 4. Buy A Fixer-Upper | more...