Articles Published in: September 2023

September 29, 2023

Do You Need Down Payment Help?

Saving for your down payment early is a great idea, and doing so can be easier when you have a clear goal in mind. But how much IS that down payment, and when should I start doing the math? Some people are intimidated by saving up for and making the down payment. Even the most disciplined house hunter used to cutting corners for a bigger goal might need some outside help regarding the down payment needed to buy a home. FHA Loans Require Less Money Down FHA mortgages have lower down payment requirements than conventional loans, especially if you want to avoid Private Mortgage Insurance on a conventional mortgage (20% is usually required in such cases). State agencies and other entities operating at the local level often offer down payment | more...

September 28, 2023

FHA Home Loans: How Much Will You Pay Per Month?

By Joe Wallace

How much house can you afford with an FHA loan? If you aren’t sure about the final amount of your monthly mortgage payment as a new house hunter, you aren’t alone. Fortunately, there are things you can do to get an estimate on how much to expect your monthly payments to be. Do The Right Math Don’t make the mistake of doing “the wrong math” for your FHA loan. You should not just be using the home’s sale price and possible interest rate to make the calculation. Why? The results you get don’t include other costs you may have to pay each month and your expectations will be skewed (most likely) too low in terms of the actual monthly financial commitment. Home Loan Math Variables The previously mentioned calculation of | more...

September 26, 2023

Who Gets Involved In Your FHA Home Loan?

By Joe Wallace

Buying a home with an FHA loan involves more than just three people; the buyer, the seller, and the participating lender’s loan officer. Third parties are typically involved in your transaction as you make your way to closing day and home ownership. Who are these third parties and why do you need to know them? They can include title companies, home inspectors, pest control, and real estate agents. Knowing the service providers are in your area is key since you will need to compare services and prices before you commit. Title Search For The House You Want To Buy A title search is a crucial step in the home buying process. Don’t buy a home without a title search as you need that process to tell you if there are unresolved | more...

September 25, 2023

Buying A House With More Than One Living Unit

By Joe Wallace

FHA mortgages are not limited to single-unit homes. Did you know that it’s possible to buy a home with an FHA loan that has as many as four living units? First-time home buyers looking for smaller homes might not have considered using an FHA mortgage to buy a house with multiple living units. And doing so is not for everyone. But for those who do need that larger home, it’s an option worth looking into for more than one reason. Multi-Unit Home Purchases Using An FHA Mortgage? FHA loan rules in HUD 4000.1 permit the purchase of house with up to four living units without changing the basic loan approval structure. You won’t be asked to make a down payment larger percentagewise than for a single-unit home. That said, a | more...

September 22, 2023

Before You Buy Your First Home

By Joe Wallace

Are you a first-time home buyer? The house hunting process is one that is best approached with some planning, and you will find plenty of advice online about what to do ahead of your loan application. But what about what NOT to do? There are fairly obvious things not to do. Nobody should apply for a car loan while buying a home, for example. You should not quit your current job, or make major financial changes while trying to convince a lender you are an acceptable risk for a home loan. But what about the other things to avoid when buying your new home? Don’t Take The First House You Really Like Some borrowers get emotional about the first property they find that they could see themselves owning. If you | more...

September 21, 2023

FHA Home Loan Questions, FHA Home Loan Answers

By Joe Wallace

First-time home buyers looking for an affordable home loan often turn to the FHA mortgage. The low downpayment requirement for those who financially qualify is an option worth looking into. Many first-time FHA borrowers have questions. Here are some of the most frequently asked. Do FHA Borrowers Need A Real Estate Agent? A real estate agent is not a requirement when you buy a home with an FHA mortgage. That said, many prefer to work with a real estate agent or realtor since they can be helpful for those who don’t know the local area and to those who need help finding a home near the right services. Some house hunters are simply are not comfortable navigating the purchase of a home and in such cases a real estate agent | more...

September 19, 2023

How Much FHA Loan Do You Need?

By Joe Wallace

How much can you borrow with an FHA mortgage? If you are looking at FHA loan limits as a new home buyer, it’s easy to assume those numbers represent the total amount that the lender will offer once the loan application is approved. But should you expect to borrow that maximum loan amount? FHA Loan Limits 101 FHA loan limits vary. They are not identical for all housing markets or housing sizes. There is a maximum loan amount for high-cost counties, FHA loan limits are higher for multi-unit homes, and there is a lower FHA loan limit in areas that don’t cost as much as the most expensive housing markets. What To Know About FHA Loan Limits FHA loan limits have a maximum or “ceiling” for high-cost housing markets and | more...

FHA Home Loans And The Biggest Credit Mistake You Can Make

September 18, 2023

No Down Payment FHA Loans?

By Bruce Reichstein

Are there no down payment FHA loans? Some borrowers feel the pinch when trying to save up for closing costs, inspections, and the required minimum investment FHA loan guidelines say are mandatory for most FHA loans. They often wonder if there is a no-downpayment option when applying for an FHA mortgage. Making a down payment is an important and mandatory part of the FHA loan process, and you won’t be allowed to sidestep this requirement. That said, there is an exception for FHA 203(h) rehabilitation mortgages, but those are reserved for victims of natural disasters in federally declared disaster areas. Why do some people mistakenly believe FHA home loans are available for no money down? Partially because they are mistaking FHA loans for the VA home loan program, which offers | more...

September 15, 2023

What You Should Know About FHA Energy Efficient Mortgages

By Bruce Reichstein

The FHA Energy Efficient Mortgage (EEM) loan program was started back in 1992 as a pilot program in five states. A few years later, the program was expanded nationwide. According to the FHA official site: “EEM is one of many FHA programs that insure mortgage loans–and thus encourage lenders to make mortgage credit available to borrowers who would not otherwise qualify for conventional loans on affordable terms (such as first-time homebuyers) and to residents of disadvantaged neighborhoods (where mortgages may be hard to get).” Borrowers who use FHA loans can add the required FHA upfront mortgage insurance premium to their home loan or pay in cash at closing. There is a monthly premium paid as part of the monthly mortgage payment. The FHA EEM is an add-on to a standard | more...

September 13, 2023

Tips You Should Know About FHA Loan Down Payments

By Joe Wallace

Down payment issues may vary depending on the home loan you select, whether it is an FHA loan, a VA mortgage, or a USDA construction loan, but some things are common for all mortgages where down payment money goes. Do You Need A Down Payment Gift? Get It In Writing A participating FHA lender can accept down payment gift funds from a variety of sources. The money can come from family, friends, and employers. But these gift-givers must also provide a letter detailing where the cash comes from and that it does not come from unapproved sources, which we will explore below. The down payment gift letter must explain where the money is from, such as cash saved at home, investments that have been cashed in for the gift, or | more...