January 24, 2021

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Articles Published in: 2021

Cash out refinancing

Do You Need To Refinance Your Home Loan?

2021 may be a very good time for some home owners to consider their refinance options. At the time of this writing, FHA mortgage loan interest rates are reported at a best-execution (ideal qualifications assumed) 2.34% by multiple sources, and FHA loan limits are higher in 2021 too making this a very good year to consider an FHA loan (even if it’s not a refi). Should you refinance with an FHA mortgage? You can refinance an existing FHA loan or a non-FHA mortgage; do you want a more competitive interest rate? Perhaps you want to get out of an adjustable-rate loan and into a lower mortgage rate than a conventional loan? Here are some scenarios you should think about when considering the options. Refinancing To Get A Better Interest Rate | more...

 
FHA Rehab Loans In 2021

Why You Should Consider A Limited 203(k) Rehab Loan

Do you want to buy or refinance a fixer-upper home? The FHA 203(k) Rehabilitation loan and the FHA 203(k) Rehabilitation Refinance loan can help if you would rather buy a fixer-upper or renovate an existing home you’re living in as your primary residence. You don’t have to buy a property to use the FHA 203(k) rehab loan; you can use it to refinance your current home and get money to accomplish FHA and lender-approved improvements or other projects associated with remodeling or renovation. That said, not every borrower needs to fully refinance a home to repair or improve it. Are you thinking of smaller projects that don’t require a huge sum of money? The Limited 203(k) Rehab loan lets you accomplish smaller projects without committing to a full refinance or | more...

 
Mortgage Rate Trends

FHA Loan Interest Rates: January 2021

The previous year was historic in many ways and the performance of home loan mortgage rates was no exception. They moved decisively below the three percent range and stayed there, moving higher occasionally but stubbornly resisting certain norms however temporarily. In 2021, people who write about mortgage loan interest rates note that while not directly tied to the performance of U.S.Treasuries, mortgage rates do trend together with Treasuries (typically speaking). In the opening month of the new year mortgage rates have not moved directly in tandem with the ups and downs of Treasuries, but that a correction of sorts has been predicted even before New Year’s Eve. That correction is coming–it’s safe to assume higher rates are in the future. What we don’t know is how long it will take | more...

 
Buying a House In the Era of COVID-19

Home Loans And Your Credit Score: The Cost Of Your Mortgage

Did you know that credit scores affect more than the simple approval or denial of your mortgage? Your overall costs for the mortgage over the long term will depend in part on your FICO scores, as we’ll explore below. FICO Scores And Your Down Payment  You have not one, but TWO FICO score standards to meet when you want to apply for a large loan such as a mortgage. The first standard is from the FHA itself (these are the FHA minimum requirements for the Single Family home loan program) and the second is your lender’s standards. Naturally these will vary from lender to lender. And your lender’s standards may or may not be higher than the FHA minimum. FHA FICO score minimums begin at 580 or better for maximum | more...

 

Celebrating Martin Luther King, Jr. Day

Happy Martin Luther King, Jr. Day 2021! Banks and markets are closed today to observe the holiday and we too feel it’s very important to remember this important day. America owes a great deal to Dr. Martin Luther King, Jr. and we are proud to observe this day dedicated to him and his accomplishments. Today, we pause our regular coverage of FHA news and FHA loan topics to observe the holiday. We resume our usual schedule of posts tomorrow. Thanks for reading!

 
FHA Construction Loan Rule Changes In 2021

FHA And HUD Update Construction Loan Rules

If you are in the market for a home but would prefer to have a house built to your specifications instead of buying another person’s dream home, the One-Time Close mortgage can help you build instead of buy. This type of loan has an FHA equivalent with low down payment requirements (3.5% in typical cases) and there’s also a VA home loan option for those with qualifying military service. The FHA and HUD recently updated its rulebook for FHA Construction loans; there are revised definitions of properties that qualify for construction loans as well as new inspection rules. Back in 2020, the FHA and HUD announced some pending changes to the FHA Single-Family Home Loan Lender’s Handbook, HUD 4000.1 due to policy alterations in 2018 and 2019. Those alterations required | more...

 
Buy or Build a House On Your Own Lot in 2020

What Are FHA Energy Efficient Mortgages?

What is an FHA Energy Efficient Mortgage (EEM)? Whether you want to buy existing construction or choose to build a house on your own lot using an FHA One-Time Close mortgage, the FHA EEM can add funds to your loan. You read that correctly–these funds are added only after the loan amount has been calculated–this is an add-on to your loan and not a higher loan amount to qualify for (see below) Are you a first-time home buyer? Don’t mistake an Energy-Efficient Mortgage as a type of home loan option like an FHA Construction Mortgage or FHA Rehabilitation Mortgage. As mentioned above, an EEM is quite different. Why EEM Funds Are Added After Your Loan Amount Is Calculated The Energy Efficient Mortgage is an add-for purchase loans including FHA Rehab | more...

 
Is your credit ready for an FHA loan?

What Affects My FHA Loan Approval? Debt Ratio Issues

Every mortgage or finance blog includes a lot of writing and advice about the need to monitor your credit reports. And make no mistake, this is important advice that is good to follow, but if you are in the market for a new home in 2021 the amount of monthly debt you have compared to your monthly income will be just as important for loan approval. Why Your Debt Matters Some applications crunch the numbers and believe they can afford the loan on paper. But what happens when that does not match what the lender gets when she runs your debt ratio numbers? People who technically qualify on paper but not in reality are bad risks for the lender and their jobs depend on screening out those bad risks. And | more...

 
Credit Requirements For Your FHA Home Loan In 2020

FHA Mortgage Rates In Early 2021

All eyes are on 2021 and what the new year could bring for housing markets, including what might happen with mortgage loan interest rates. FHA loans and other government-backed home loans saw sub-three-percent mortgage loan interest rates in 2020, and the earliest days of 2021 those rates did not rise above three percent. Mortgage rates for FHA home loans including FHA One-Time Close construction loans, FHA Rehab loans, and others remain below the three percent line (assuming ideal conditions including a well-qualified borrower) where they sat, more or less, for a significant amount of time in years past.  American political chaos, the coronavirus pandemic, economic uncertainty, nervous investors, and other variables have all worked together to keep mortgage loan interest rates below three percent for the time being. Did the | more...

 
Don't Make These Mistakes With Your One-Time Close Construction Loan

Monitoring Your Credit Ahead Of Your Rehab Loan Or One-Time Close Loan

Credit monitoring is important for any consumer but borrowers interested in building a home on their own lot using a One-Time Close (OTC) construction loan or even an FHA 203(k) Rehab loan should give serious thought about investing in credit monitoring as early as possible in the planning stages. This can be a big advantage for those seeking rehab or construction loans; participating FHA lenders may require higher FICO scores for construction loans and you’ll want every advantage in that department including knowing the contents of your credit report and the changes to it as they happen. FHA Rehab Loans allow borrowers to buy fixer-upper loans and have work done to bring them up to code and FHA standards; FHA One-Time Close (OTC) mortgage loans allow borrowers to build a | more...