Articles in Category: Energy Efficient Mortgage

April 7, 2017

FHA Loan Rules: Borrowers, Co-Borrowers, Co-Signers

Do you know what the FHA loan rules are for borrowers, co-borrowers, and/or co-signers? What are the requirements for each and how is your lender required to proceed with each? The FHA home loan rule book for single family mortgages, reverse mortgages, and refinance loans is HUD 4000.1 It instructs the lender that borrowers have an occupancy requirement-the borrower must agree to take ownership of the home and use it as her or his primary residence after loan closing. Usually the borrower will have to move in within 60 days of closing. HUD 4000.1 also tells the lender that borrowers may only purchase homes with FHA loans withing the United States or its’ territories. Purchase of non-U.S. real estate is not permitted with an FHA mortgage. All parties to be | more...

January 31, 2017

Eligibility Rules For FHA Loans

By Joe Wallace

Eligibility rules for FHA loans are found in HUD 4000.1, which addresses who is permitted to apply for an FHA single-family home loans. Who can apply for an FHA loan and what do the rules say about these applicants? The most basic eligibility rules for FHA loans include the requirement that the borrower be an owner-occupier of the property to be purchased. FHA loan rules do not permit FHA single family home loans to be used for investment properties, so the borrower who wishes to buy a multi-unit property and rent out all of those units to other people would not be approved for the mortgage. The same is true of those who wish to purchase time shares, condo hotels, or other “transient occupancy” or short-duration occupancy properties. That said, | more...

January 3, 2017

FHA Mortgages: Loan Basics For 2017

By Joe Wallace

For those who are weighing their real estate options in 2017, an FHA home loan can be an important option. Compare the down payment and interest rates on FHA mortgages with their conventional counterparts and it’s easy to see why many borrowers opt for an FHA mortgage. FHA loans, like most mortgage loan programs (with the exception of VA home loans, which are in general available only to qualifying military members), require a down payment which is usually 3.5% of the adjusted value of the property. Your down payment is required above and beyond other closing costs, mortgage insurance, etc. and must come from approved sources such as savings/checking accounts, the proceeds from cashed-in investments, cash saved at home, etc. Your down payment cannot come from payday loans, credit card | more...

December 28, 2016

FHA Loan Applications In 2017

By Joe Wallace

Are you one of the many house hunters planning on filling out FHA loan applications for 2017? Are you ready to apply? Here are some tips to help you determine how close you might be to the application stage of a new FHA mortgage. Credit Reports Do you know the contents of your credit reports? Do you know your FICO scores? If not, you’ll need some additional time before applying for your home loan to review your credit, see what the lender may see, and determine whether your credit history is free of errors or evidence of identity theft. If your credit report shows erroneous information or if you suspect identity theft based on questionable entries on your report, you will need additional time prior to your FHA loan application | more...

July 28, 2016

Conventional Loans Versus FHA Mortgages

By Joe Wallace

What’s the major difference between FHA mortgage loans and conventional loans? Actually there are several, but the first and most basic difference is that an FHA mortgage is guaranteed by the government, where a conventional loan is not. The government’s backing of an FHA mortgage makes the loan less of a risk to the financial institution offering you a line of credit to purchase your home. And because the loan is backed by the government, FHA mortgages feature lower down payment requirements than many conventional mortgages. You may find conventional loans requiring 10 or even 20 percent down, where an FHA mortgage for qualified borrowers with FICO scores at 580 or above may qualify for maximum financing. That means a down payment requirement of only 3.5% of the adjusted value | more...

July 8, 2016

FHA Loans Versus Conventional Loans

By Joe Wallace

Here’s the Scoop on Conventional Loans from FHA.com on Vimeo. What are the differences between FHA home loans and conventional loans? There are several, some features of mortgage loans can vary depending on the lender, and state law may also affect how your home loan is handled depending on circumstances, but there are a few very important general differences to keep in mind when comparing FHA loans to conventional loans. The first difference is the basic nature of the loan itself. Conventional loans are not backed by the government, unlike FHA home loans where the FHA guarantees a portion of the loan to make it more attractive to the lender to issue credit. In the event that a borrower defaults on an FHA loan, the lender and the FHA have | more...

June 27, 2016

FHA Loans: Terms and Definitions You Should Know

By Joe Wallace

Are you thinking about buying a home with an FHA mortgage or refinancing a current mortgage loan? If you are new to either process, or if it’s been a long time since you purchased your first home, there may be terms and definitions you need to re-familiarize yourself with. Here are some basics you should know: FHA single-family home loans are what most borrowers are after when they want an FHA mortgage to purchase a home, town home, condo, manufactured home, etc. The idea is basically that the home purchased with the FHA loan is an owner-occupied property which is primarily residential in nature, and where at least one of the borrowers or co-borrowers will live once the loan is closed. Occupancy requirements refer to the FHA policy that single | more...

June 3, 2016

FHA Loan Questions and Answers

By Joe Wallace

Tired of renting and looking to purchase a home of your own? There are many questions many first time home buyers or first time FHA loan applicants have. Here is a list of some of the most frequently asked questions about FHA mortgages. Is There An Income Limit For FHA Loans? No. FHA mortgages are not designed specifically for one type of financial situation or another. You cannot “earn too much” with the FHA single family home loan program. All wage earners are encouraged to explore their FHA loan options. Is There A First-Time Home Buyer Advantage Or Preference With FHA Mortgages? While an individual lender may offer certain perks for first-time home buyers, the FHA single family home loan program itself does not have a first time home buyer | more...

May 31, 2016

FHA Loan FICO Score Rules

By Joe Wallace

FICO scores play an important part in any home loan application. There is often confusion about FICO scores, with some applicants assuming that only FICO scores determine loan approval, while others wrongly assuming they only have one credit score. What’s the reality? There are three major credit reporting agencies, (Equifax, TransUnion, Experian) and so a borrower may actually have three different scores. That is one reason why lenders encourage borrowers to check their credit reports as early as possible before applying for an FHA mortgage. One credit report could have discrepancies another one does not reflect, etc. A borrower should always know what the lender is going to see on the report before the application is filled out. FICO scores are indeed an important part of FHA loan approval, but | more...

April 11, 2016

Mortgage Rate Trends: Near Best Levels All Year?

By Joe Wallace

With only one day last week with rates moving upward, we’ve seen mortgage loan interest rates hit territory better than we’ve seen for a good portion of 2016. Much of last week was either improvement, or holding steady following that improvement. On Friday rates didn’t move downward, but they definitely held steady. 30 year fixed rate conventional mortgage rates with some very competitive lenders were as low as 3.5% best execution, with many more offering a best execution 3.625%. FHA mortgage loan rates remained at 3.25% best execution, having moved out of a previous range with 3.5% at the top end (best execution). It’s not clear whether this rate will become a new comfort zone for FHA loans or if we’re seeing a short term trend only. As always, best | more...