Articles by: Joe Wallace

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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February 28, 2024

FHA Home Loan Costs And How They Vary

By Joe Wallace

An FHA loan has several expenses including an appraisal, home inspection, and title search expenses. These costs are not standardized and may vary depending on where you buy the home. Aside from more obvious issues like FICO scores and how the lender uses them to determine your mortgage interest rate, what are some considerations to make in this area? We examine some key factors below. Location Counts One big factor in your costs for a mortgage? Where you conduct the transaction. As mentioned earlier location may play a role in the costs. And some borrowers assume that a service will cost more in a high-profile housing market. For example, a title search in California. Is this likely to cost more than one in Idaho? In some cases, the assumption isn’t | more...

February 26, 2024

FHA Loan Basics In 2024

By Joe Wallace

Are you new to FHA loans? Do you feel the list of requirements is a bit overwhelming? You are not alone. Many first-time home buyers experience these feelings as they get to know the home loan landscape. The good news is that your confusion will end the more you learn about how home loans work. Here is some clarity on some common FHA loan basics that some newcomers find confusing in the early days of mortgage planning. FHA Loan Approval Basics Looking at finance blogs, you will find a variety of FHA home loan requirement lists. Here is an example of one, published by NerdWallet. There are important nuances to understand about the list above. before you proceed. Let’s review each section of this list. To start, it is true | more...

February 22, 2024

Before You Apply For An Adjustable-Rate Mortgage

By Joe Wallace

Are you worried about FHA loan interest rates? If you have decided to explore your home loan options with an FHA adjustable rate mortgage, here are some important details to know while still planning and saving up for the loan. FHA ARM Loans Differ From Conventional ARM Loans An FHAS adjustable-rate mortgage isn’t necessarily the same as a conventional equivalent. Your conventional lender’s occupancy guidelines will vary. Does yours have a requirement that the property securing the ARM loan serves as your home address? FHA ARM loans definitely require this as a condition of loan approval. Occupancy is key in that at least one borrower obligated on the FHA loan must live in the home being refinanced or purchased with an ARM. FHA loan rules on occupancy extend to nearly | more...

February 21, 2024

Who Needs Homeowner Insurance?

By Joe Wallace

FHA loans, VA mortgages, and similar government-backed home loans don’t force the borrower to select specific types of homeowner insurance to protect your investment but that does not mean it’s not necessary. Mortgage insurance protects the lender. If the borrower defaults on the FHA home loan, mortgage insurance minimizes the loss for the bank. Home insurance, on the other hand, is a tool for the borrower. It protects your investment by insuring your home and its contents depending on the wording of your specific policy. First And Foremost Paying for both insurance types may make you feel there is protection for all circumstances. But not all types of damage are covered by your insurer. Did you know that flood insurance is completely separate from insurance for water damage? Some borrowers | more...

February 15, 2024

Home Loans: When To Get Pre-Approved

By Joe Wallace

When should a house hunter choose to get pre-approved for a home loan? It’s a common question many borrowers ask. But this question can be confusing because some use the term “prequalify” interchangeably with “pre-approval”. But these two terms actually mean different things. Getting prequalified for a home loan is something you do early in the house-hunting stages. You are not ready to make any offers, but you want to let sellers know you are not window shopping. Prequalification means the borrower has filled out some basic paperwork with a lender while in house-hunting. It is not loan approval, and borrowers still, at this stage, have a ways to go before loan approval happens, including filling out basic loan application paperwork (not pre-qualification paperwork). Do You Always Need To Pre-Qualify? | more...

February 14, 2024

First Time Home Buyers Should Know These FHA Loan Rules

By Joe Wallace

There are some FHA loan issues that are crucial to understand before you commit to a lender or a mortgage. For example, do you know what to do if the appraisal is lower than the asking price? Or how long you will pay for mortgage insurance? These are important things to know when planning and saving for your mortgage. FHA Loan Appraisal Issues If the house is not worth as much as the price tag, your participating FHA lender cannot lend more than the actual value of the property. This rule does not prevent add-ons to the loan, but the base loan amount is for the appraised value. If you want to buy a house that appraises lower than the asking price, you can’t finance the difference. You must pay | more...

February 13, 2024

FHA Loans Versus Other Government-Backed Mortgages

By Joe Wallace

There are three important government-backed mortgage loan options. They are FHA loans, VA mortgages, and USDA home loans. If you are new to these mortgage programs here are some basic facts about what to know when comparing these home loans. Basic Similarities Between FHA, VA, and USDA Home Loans How do these loans stack up to one another? These loans offer the lender federal government guarantees, reducing the risk to the bank and allowing the lender to offer lower-risk mortgages to customers with lower FICO scores or with other issues making it harder to qualify for a conventional loan. These loans also feature lower down payment requirements than some conventional lenders offer consumer benefits such as restrictions on your closing costs and what fees the lender is permitted to include. | more...

February 12, 2024

FHA Loan Costs: Questions Answered

By Joe Wallace

Some borrowers don’t realize they are permitted to finance certain costs into an FHA home loan. This can help save money out of pocket in the earliest stages of the loan, making it easier to afford the basic initial costs of buying property. Adding more to your home loan can make your monthly payments higher, but for some, that may sound like a good trade-off for saving money upfront on the transaction. Some borrowers feel any addition to their baseline monthly payment needs justification and want to avoid adding to the loan wherever possible. Choose any FHA loan add-ons carefully. Be sure to ask the lender about each addition to your mortgage. How will it increase your monthly payment? Can I Finance FHA Required Mortgage Insurance? Yes, but with caveats. | more...

February 7, 2024

What To Know About FHA Condo Loans

By Joe Wallace

Do you need to learn how to buy a condo unit? Do you want to buy one with an FHA mortgage? The first thing to know is that FHA loan rules say condo units purchased with an FHA mortgage must either be on or added to the FHA approval list. There are exceptions for condos not on the FHA list, and these may be handled on a case-by-case basis. Always ask the participating FHA lender about this issue as early as you can. How FHA Condo Loans Work Condo loans are unique because the buyer is not the legal owner of the entire structure of the building their condo unit is located in. A condo is only a single unit in a bigger shared occupancy agreement. You also join a | more...

February 5, 2024

FHA Loan Terms: Which To Choose?

By Joe Wallace

There are important differences between FHA loans with 15-year mortgages and 30-year loan terms. Those differences include the number of years you’ll pay but also how much interest you may owe. What do you need to know about the fine points of selecting a loan term for your mortgage? The Start Of Your 15 or 30-Year Loan Term 15-year and 30-year mortgages typically start their loan terms the month you and the lender agree upon in writing. Usually, this occurs sometime after closing day. Will the actual time you pay on the loan be affected by your move-in date? In some cases, yes. If you have a construction loan, you might have to wait up to 12 months while the construction is happening. Once it’s completed and all inspections and | more...