Articles in Category: Fixed Rate Mortgage

June 25, 2020

Anticipating Closing Costs For Your New Home Loan

Buying a home requires planning and saving. Especially for closing costs, which can include appraisal fees, the home inspection, compliance inspections, and the Up-Front Mortgage Insurance Premium. It takes time to save for these expenses, but some borrowers will pay more up front than others. That is usually due to a combination of factors, but the thing new home loan applicants need to know is that your financial needs and goals will dictate how and when you pay certain closing costs. Did you know you can finance some closing costs and have the home’s seller help you pay for others? Government-backed mortgages like FHA home loans (including FHA One-Time Close construction loans which can help even a first-time home buyer build a home from scratch) make buying or building a | more...

June 23, 2020

Mortgage Rates Hovering Near Historic Lows

By Bruce Reichstein

Mortgage loan interest rates have been holding steady near all-time lows. FHA mortgage loans (on fixed-rate 30 year mortgages) were reported at a best-execution 2.50% on Monday June 23, 2020 and talk persists that these low numbers could be with us longer than expected unless there are market forces that run counter to the current downward trend. Some marketwatchers point out that current low rates can be blamed at least in part on coronavirus concerns, but the reverse is not necessarily true if the crisis begins to abate without a feared second wave of infections. Investors and markets may not react in equal measure to the good economic news as they did to bad economic developments. What’s bad for the economy is often good for mortgage loan rates, and that’s | more...

June 16, 2020

Buying Your First Home With An FHA Mortgage

By Joe Wallace

First-time home buyers love hearing about the low down payment requirements for FHA mortgages, and the fact that FHA home loans allow you to apply for a mortgage with a government-guarantee that helps keep mortgage loan interest rates lower on these types of loans. But some other perks aren’t so obvious; did you know that with an FHA mortgage you are permitted to have your seller contribute up to six percent of the home’s price as closing costs? The seller can’t contribute to your down payment but can help with those closing costs. FHA loans allow contributions toward your down payment–down payment assistance from people who have no financial stake in the outcome of your loan is permitted according to FHA loan rules. That means down payment gifts can come | more...

Preparing For An FHA Mortgage? What You Need To Know About "Contingent Liabilities"

June 11, 2020

Fed Announces Bond Policy Influencing Mortgage Loan Interest Rates

By Joe Wallace

In the second week of June, the Fed announced important policies that influence mortgage rates. FederalReserve.gov published a statement announcing monetary policy from the Federal Open Market Committee including: The Board of Governors of the Federal Reserve System voted unanimously to maintain the interest rate paid on required and excess reserve balances at 0.10 percent, effective June 11, 2020. As part of its policy decision, the Federal Open Market Committee voted to authorize and direct the Open Market Desk at the Federal Reserve Bank of New York to run “open market operations as necessary to maintain the federal funds rate in a target range of 0 to 1/4 percent”; The vote also authorized an “Increase the System Open Market Account holdings of Treasury securities, agency mortgage-backed securities (MBS), and agency | more...

Why FHA interest rates are lower than conventional mortgage rates

June 10, 2020

Why FHA Loan Interest Rates Are Lower

By Joe Wallace

Have you ever started to research home loans and found yourself getting confused at all the data presented to you? What is the difference between a 30-year fixed rate conventional home loan and a 30-year fixed rate FHA mortgage? How do you know which loan to choose? Buying a home is one of the biggest commitments you can make financially as an ordinary, non-business borrower. The down payment alone makes some borrowers worry they can’t afford the loan (fortunately there may be local down payment assistance programs in your area that can help) or that they won’t be able to understand the intricacies of a mortgage. But buying a home involves a lot more common sense than you might realize. One area this is true for is interest rates–once you | more...

June 5, 2020

Mortgage Loan Interest Rates Below Three Percent

By Joe Wallace

Financial magazines reported mortgage rates falling below three percent; these reports in early June point to the numbers we’re seeing both for conventional mortgages (depending on the term of the loan) as well as government-backed loans like FHA home loans. Why have mortgage rates continued to fall to historic lows? Market volatility, daily ups and downs over COVID-19, civil unrest, and trade war concerns have contributed to these low rates. But the volatility associated with today’s mortgage loan market makes it hard to predict whether these rates will be with us tomorrow, next week, or ever again. Fortunately, borrowers and lenders use a toll called a mortgage rate lock commitment to protect the loan applicant from future changes. How does it work? When you make an offer on a home | more...

May 14, 2020

FHA Appraisal Rules You Should Know Today

By Bruce Reichstein

The FHA appraisal is a requirement of the home loan process; it is designed to help establish current market value of a property based on the latest property values, the overall condition of the home and property, etc. An appraisal is NOT the same as the separate, borrower-funded home inspection. Appraisals are nowhere near as in-depth as inspections and the results of the appraisal should not be mistaken for a home inspection. Appraisals are required for all forward mortgages. Recent changes to appraisal rules in 2020 in response to social distancing required by the COVID-19 novel coronavirus pandemic make the process operate differently than before temporarily. In March of 2020, the FHA and HUD issued a Mortgagee Letter announcing situational changes to the appraisal requirements that included the ability to | more...

FHA home loans, interest rate cuts, and your mortgage

May 8, 2020

FHA Loans, Interest Rate Cuts, And Your Mortgage

By Bruce Reichstein

Home loan interest rates have been on a wild ride. The Fed cut interest rates in March of 2020–two times in response to coronavirus economic issues. But the Fed rate cut did not mean mortgage loan interest rates were directly cut. Home loan rates move up and down based on market forces, investor behavior, etc. The Fed’s rate cut actions are not a specific trim to home loan rates, but the effects of that rate cut did include influencing how investors did business in the wake of those cuts. It’s easy to assume the Fed has some kind of direct control over home loan rates, but what is the reality? How do home loan rates work and what do you need to know moving forward with your loan application? On | more...

May 7, 2020

Thinking About Buying Your First Home?

By Joe Wallace

As a first-time home buyer, you might think your home loans are limited to a certain type of property, a certain price range, or other limitations. But did you know that with FHA mortgages, first-time borrowers who qualify may be able to apply for condo loans, construction loans, and even loans to buy and rehab a fixer-upper property. There are myths about FHA mortgages that hinder some borrowers or prevent them from exploring FHA loan options altogether. One such myth is that FHA mortgages are ONLY for first-time home buyers or that there is a first-time buyer advantage for loan approval. Not true. Another myth is that FHA mortgages are only for low-income people or those with a demonstrated financial need. This is also not true. There are no income | more...

April 15, 2020

Facts About FHA Mortgage Loans

By Joe Wallace

FHA home loans and refinance loans are complex, and the less you know about how the process works, the harder it can be to make sense of your loan. What you don’t know about home loans can make a big difference in the price you pay, the terms you accept, and more. FHA Loans: Credit Checks Are Very Important Credit counts. How much do you want to pay in interest and money up front for the down payment? Your credit score affects the cost of your loan. How can you get financially ready for your home loan application? Do not begin the FHA loan application process with fewer than 12 months of on-time payments. You should make on-time, every time payments on all financial obligations with no late or missed | more...