September 19, 2019

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Articles in Category: FHA Refinance

Why You Can't Buy An Airbnb With An FHA Mortgage

Why You Can’t Buy An Airbnb With An FHA Mortgage

Some borrowers read our previous blog posts on what you can and cannot purchase with an FHA home loan and want to know why you can’t buy an Airbnb with an FHA mortgage. FHA loan rules in HUD 4000.1 state clearly that FHA Single-Family Mortgages are intended for primary residences and that any non-residential use of the home must be “subordinate to” the residential nature of the property. HUD 4000.1 also includes instructions to the lender about other acceptable uses of the property including various prohibitions including whether or not you can rent unused portions of your home out to other people after buying it with the FHA loan. For those who are interested in renting to another person as a long-term resident, this is NOT a problem. FHA loan | more...

 
FHA Refinance Loan Options Millenials Should Know

FHA Refinance Loan Options Millenials Should Know

Should millennials explore their refinance options right now? Some finance and mortgage publications seem to think so, and recent headlines indicate that many are taking advantage of recent lower mortgage loan interest rates to explore their refi options. Some note that in recent times, some millennials have overlooked FHA refinance loans; one source indicates that FHA refinance applications dropped some nine percent during July 2019 among millennials; some blame that in part on a communication breakdown between lender and borrower where FHA loan benefits are concerned. What FHA refinance options should you know about before choosing the right kind of loan for you? FHA loans can be used to refinance conventional, VA, USDA, and other non-FHA mortgages. You can refinance an existing FHA mortgage with cash-out refinancing to convert the | more...

 
Why Consider An FHA 203k Rehab Loan

Why Consider An FHA 203k Rehab Loan

Why consider a 203k FHA Rehab Loan for buying or refinancing a property that needs repairs? For some the answer is simple. Some house hunters may be looking for a project home to customize. Others may be home owners who want to refinance to make upgrades and renovations to the home. The FHA 203k Rehab Loan and Refinance Loan option is a good one to explore. Some are tempted to make home improvements with a credit card rather than a mortgage or refinance loan; this might work for those who already own the home, but it’s important to compare the costs of financing such projects versus putting them on a credit card. Anyone who is house hunting and finds a property they like but won’t meet building code and/or minimum | more...

 
HUD Announces Important Change To FHA Cash-Out Refinance Loan Program

HUD Announces Important Change To FHA Cash-Out Refinance Loan Program

The Department of Housing and Urban Development has issued a mortgagee letter announcing a major change to the FHA Cash-Out Refinance Loan program. Effective September 1, 2019, the loan-to-value ratio for FHA cash-out loans is reduced from 85% to 80%. All FHA cash-out refi loans with FHA case numbers issued on or after 1 September 2019 will have the lower LTV. This has the effect of reducing the amount of cash back to the borrower on the transaction. The HUD press release states that the reduction is intended to protect against weaknesses in the housing market, and cash-out refinance loan defaults. The FHA has experienced an overall increase in cash-out loans as high as 250 percent according to HUD. In light of that statistic and other data, the FHA concluded | more...

 
FHA Home Loans And Perfect Credit: Fact Versus Fiction

FHA Home Loans And Perfect Credit: Fact Versus Fiction

We get plenty of reader questions about FHA home loans. Many of those questions have to do with worries that a borrower won’t qualify for the loan. One of the biggest topics in this area? “Can I get an FHA Home loan without perfect credit?” We fielded a question like that recently-the term “perfect credit” was used. The reader seemed to assume that perfect credit is required in order to buy a home. But who do you know as a homeowner with perfect credit? The truth is, FHA home loans do NOT require perfect credit for loan approval. But many potential home owners don’t understand how the credit check process works, or the requirements for loan approval. So it’s easy to understand how people can assume wrong things about the | more...

 
Mortgage Loan Interest Rates: What You Need To Know About Trends

Can I Do An FHA Cash-Out Refinance On A Rental Property?

When you buy a home with a mortgage loan, you generally have the option later down the line to apply for cash-out refinancing on that home. It doesn’t matter if you have a conventional mortgage, VA loan, or an FHA home loan, cash-out refinance options are available once you have made a minimum amount of mortgage loan payments (not ideal) and the cash-out options only get better the longer you pay on the original mortgage. Why is cash-out refinancing not such a great deal in the earliest days of your mortgage? Partially because you haven’t paid down the loan enough and/or waited for your property values to increase long enough in the right circumstances to get much value out of the property. Generally speaking, the longer you pay on the | more...

 
FHA Home Loan Rules For Refinance Loans

FHA Home Loan Rules For Refinance Loans

When headlines about home loan interest rates start appearing with the terms “new lows” or “lowest in months”, the minds of many home owners turn to refinancing. It’s very tempting to explore refinance loan options when rates begin falling; saving more money over the lifetime of the refinance loan is appealing and some borrowers feel they didn’t shop around aggressively enough for a better interest rate the first time around. When you are getting ready to refinance, what do you need to keep in mind in terms of FHA refi loan rules? Here are some areas to ponder. Basic Refinance Loan Transactions FHA refi loans come in a few basic types according to the FHA Lender’s Handbook, HUD 4000.1: Cash-out refinances: designed to pull equity out of the Property. No | more...

 
FHA Refinance Loan Options Millenials Should Know

Who Can Apply For An FHA Reverse Mortgage?

Borrowers who want to pull cash out of their home, converting value into cash back, have two basic options with an FHA-guaranteed loan. One of those options is the FHA Reverse Mortgage, also known as a Home Equity Conversion Mortgage. This is for borrowers who either own the home or are very close to paying off the mortgage loan on the property. FHA HECM mortgages allow for cash back with no monthly payments required since the loan is paid off when the borrower dies, or sells the property. Does this sound like an option you would like to explore? There is one very important caveat with FHA Reverse Mortgages-they are not available to borrowers under the qualifying age, which is 62 or older. That is why your lender may try | more...

 
Four Questions About FHA Home Loans

Why Do People Use Cash-Out Refinancing?

There are many reasons why people want to convert the value of their home to cash. Some people use FHA cash-out refinancing to pay off credit cards or help lower student loan debt, others have needs they want to meet around the house whether its’ home improvement in general, building a rec room, or replacing old appliances. But whatever your cash-out refinance loan needs, there are some important issues to consider that may help you decide whether FHA cash-out refi options are right for your plans. Why do we say this? Because some people choose to pay for their home improvement projects or other expenses using a cash-out refi loan while others consider using a credit card to pay for them instead. What’s the best choice? In many cases the | more...

 
FHA Home Loan Tips

Six FHA Home Loan Tips

Know Your FHA Home Loan Limits All housing markets are subject to variations, and not all of them have the same costs or median house prices. And not all housing types are available in a given market. The home in California averaging at one price range won’t be the same as a housing market in a less expensive area. FHA home loan limits for high-cost and low-cost areas are adjusted rather than featuring an one-size-fits-all approach, and those limits are adjusted annually. You should always check the current loan limits before committing to a new home loan to see what you can expect in your chosen market. FHA Loans May Be Available With Adjustable Mortgage Rates and You Can Always Choose A Fixed Rate Loan Instead The fixed-rate FHA mortgage | more...