Articles in Category: Fixed Rate Mortgage

July 28, 2022

Article Update: Do Townhouses Qualify For FHA Loans?

Back in 2018, we published an article about the FHA home loan rules for townhouses. Do they qualify for FHA home loans? One source defines a townhouse as: “…multi-floor homes that share one- to two walls with adjacent properties” but which feature separate entrances for each property. What do the FHA home loan rules say about purchasing townhomes with an FHA mortgage? FHA Loan Rules For Property Eligibility The FHA Single Family Home Loan rule book, HUD 4000.1, has seen some important changes since we wrote the original article in 2018 but in 2022 it still says the following property types may be purchased with an FHA mortgage: -detached or semi-detached dwellings -Manufactured Housing -townhouses or row houses -individual units within FHA-approved Condominium Projects As you can see from the | more...

July 25, 2022

Article Update: What Are The FHA Loan Requirements For Wells and Septic Systems?

By Joe Wallace

In 2017, we published an article that asked an important question: what are the FHA requirements for sewer/septic systems? As we discussed back then, there are important issues to consider if the property you want to buy with an FHA mortgage can’t be hooked up to a local utility. Our 2017 article asked an important question: what are the FHA requirements for sewer/septic systems? For example, the placement of the septic tank; back then, we reported FHA loan rules required the tank to be at least 50 feet from any well on the property. In 2022, those rules have not changed. And wells must be a proscribed distance from other features of the property including: Property line: 10 feet Septic tank: 50 feet Drain field: 100 feet Septic tank drain | more...

July 20, 2022

What To Think About When Comparing FHA Lenders

By Joe Wallace

Why do we say it’s so important to choose the right lender for your FHA home loan? Because no two financial institutions are exactly alike, and you may find a lender willing to offer the type of mortgage you need at an affordable interest rate. But until you compare offers how do you know you have set your price point and target interest rate realistically? It’s not just whether the lender offers the type of FHA mortgage you need–such as an FHA condo loan or an FHA One-Time Close Construction mortgage. It’s also whether the lender is offering you a competitive interest rate. When rates trend higher, does your selected loan officer reprice the interest rates or up the closing costs instead? If you don’t know, you won’t know how | more...

June 24, 2022

Planning Your Home Loan

By Joe Wallace

The planning stage of your home loan is extremely important. This is where you will determine what kind of home you might want, the price range you can afford, and how much down payment you need to save up to make. One big choice you face in the planning process? Decisions about issues related to long-term occupancy of the home, whether you plan to sell within a short or long amount of time and how you should arrange your financing to accommodate those needs. What kind of arrangements? Some borrowers don’t apply for a fixed-rate mortgage. They know they are not keeping the home for the long term and choose to take advantage of lower interest rates offered in the introductory period of an FHA Adjustable Rate Mortgage (ARM) instead | more...

June 21, 2022

Seller’s Markets, Buyer’s Markets, And FHA Loans

By Joe Wallace

What does it mean to get an FHA loan when you are in a buyer’s market? What does it mean to use an FHA mortgage in a seller’s market? If you are new to house hunting chances are you’ve heard these terms before, but what do they mean in the context of a house hunt? FHA Home Loans In Buyer’s Markets What does it mean to be shopping for a house in a buyer’s market? The simplest answer is that you have an advantage as a buyer because there may be plenty of homes to choose from with little serious competition from other buyers. That lack of competition may be because of the supply of available houses for sale. In a buyer’s market, you would still want to get pre-qualified | more...

June 20, 2022

Celebrating Juneteenth

By Bruce Reichstein

Juneteenth is the newest federal holiday in the United States. Today, we commemorate the emancipation of enslaved African Americans–an event formalized in Texas on the day General Order 3 was issued by Union Army General Gordon Granger. That order announced freedom for enslaved people in the State of Texas on June 19, 1865. The actual day, June 19th, is celebrated along with a formal holiday observation of Juneteenth held on Monday, June 20, 2022 with banks, financial markets, post officers, and schools closing in honor of the day. We too pause our usual discussions of all things related to FHA loans to observe Juneteenth. Thank you for reading and our regular posting schedule returns tomorrow.

June 16, 2022

Factors That Affect Your FHA Mortgage Interest Rate

By Joe Wallace

When the Fed meets to set monetary policy, it has the option to raise or lower the nation’s interest rates. That is a move that can directly affect some areas of the finance sector such as credit cards, but it indirectly affects mortgage loan interest rates. The Fed’s actions don’t actually change mortgage rates. Investor behavior in reaction to the Fed’s announcements, on the other hand, do have the potential to affect mortgage rates. The rate you are offered by the lender tomorrow may be affected by news and developments in the markets today. But that’s not the only factor that can affect the interest rate you are offered. At this stage for many mortgage-focused blogs, a conversation about FICO scores goes right here. It’s true that your credit scores | more...

June 13, 2022

What To Know About Renovating Your Home With An FHA Loan

By Joe Wallace

FHA home loans for renovation include the FHA 203(k) Rehabilitation loan and refinance loan options. There are also FHA Energy Efficient Mortgages or FHA EEMs that allow energy-saving upgrades and improvements to the property. EEMS are add-ons allowed for most FHA home loans, not a separate loan program, and adding an EEM potentially raises your monthly mortgage payment. If you need to apply for an FHA home loan to renovate, the first thing you need to know is that on paper, FHA loan rules say you may be allowed to be your own builder or contractor. However, lender standards will apply and you may find that your FHA lender does not permit this. You’ll need to ask directly as early in the process as possible. FHA loan rules say that | more...

June 2, 2022

Applying For Your FHA Mortgage

By Joe Wallace

After you have gotten all the planning done, and after you have saved for your downpayment and gone house hunting, you’ll come to the place where you are finally ready to apply for a home loan. What do you need to know about this process and how it works? One of the most important things to decide is how much personal help you might need to apply. There are three basic options that may be open to you depending on the lender. Whether you need to pre-qualify, get pre-approved, or actually begin the application process itself, your lender may take a specific approach to how your loan documentation and application data is submitted. Some lenders take a very hands-off approach, allowing you to apply and submit online without requiring any | more...

May 26, 2022

What You Should Know About Using An Escrow Account For Your FHA Loan

By Bruce Reichstein

Are you planning to buy a home? Whether you seek an FHA mortgage or not, you may be required to use an escrow account for the loan transaction. You will need a safe place to deposit earnest money in the buying phase and you may also need escrow to pay your property taxes each year. FHA Loans Require Escrow Your participating FHA lender may require the use of an escrow account. Are you applying for an FHA 203(k) Rehabilitation Loan or an FHA One-Time Close Construction loan? Both types of mortgages require payments to contractors who are renovating or constructing your home. FHA loan funds must be stored in escrow until it’s time to use them. There is no unrestricted cash back to the borrower with these loans, so escrow | more...