December 16, 2019

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Articles in Category: FHA Requirements

Higher FHA Home Loan Limits For 2020

Higher FHA Home Loan Limits For 2020

In 2019, the FHA and HUD announced higher loan limits, giving borrowers in most counties additional borrowing power to purchase, build, repair, or refinance an owner-occupied home. The uptick in FHA loan limits for 2019 led some to believe that it might be possible to see another year of higher loan limits, while others speculated that higher limits may not be a trend, but simply a typical course correction for home loan limits. Regardless of which camp 2020 borrowers were in back then, it seems there is another year to contemplate higher loan limits; the Department of Housing and Urban Development has released the FHA loan limits for 2020 and they are indeed higher in most areas. The HUD announcement discussing the overall increase in the FHA loan limit for | more...

 
Who Qualifies For FHA Loans?

Who Qualifies For FHA Loans?

Whether you’re interested in building a house from the ground up on your own lot or you need a mobile home or condo unit, there is an FHA home loan for you. Who qualifies for these mortgages and why? FHA Loans For First-Time Home Buyers FHA mortgages are open to first-time homebuyers without perfect credit. You can apply for an FHA home loan even with past credit mistakes; the best thing to do is to review your past credit and make sure your home loan application is turned in once you have a full year of on-time payments on your credit record. First-time borrowers should know an FHA mortgage, even an FHA One-Time Close construction loan is within their reach thanks to low 3.5% down payment requirements and the ability | more...

 
Home Loans After A Bankruptcy

Home Loans After A Bankruptcy

Are you interested in a new home loan but are worried about a past negative credit event such as a bankruptcy? Borrowers sometimes have many questions about FHA mortgages and bankruptcy. One of the most common scenarios asked about include borrowers who are about to be discharged from their bankruptcy and are contemplating a home loan. With low credit scores and a recent bankruptcy, what is a borrower to do in order to become eligible for a home loan once more? In such cases, you need to know the FHA loan rules in HUD 4000.1 which require a minimum waiting time or seasoning period before a borrower can apply for an FHA mortgage once more. The waiting time begins at the time the bankruptcy is discharged. Note that it does | more...

 
Home Loan Approval: Why FICO Scores Matter

Home Loan Approval: Why FICO Scores Matter

If you want to buy a home, you will need to become well-read about credit, credit scores, and how your credit report affects your ability to apply for a mortgage loan. There are three major credit reporting agencies, Equifax, TransUnion, Experian. The fact that there are three agencies is one good reason why credit experts encourage borrowers to check their credit reports as early as possible prior to applying for an FHA mortgage or any other major line of credit. One credit report could have discrepancies another one does not reflect, etc. A borrower should always know what their lender is going to see on the report before the application is completed. FICO scores are indeed an important part of FHA loan approval, and borrowers should respect FICO scores and | more...

 
Buy or Build a House On Your Own Lot in 2020

Buy or Build A Home With An FHA Mortgage In 2020

Are you thinking about becoming a homeowner in 2020? Some borrowers have an advantage when getting financially ready for their FHA loan application, while others may overlook important areas that need attention long before the loan paperwork is filled out. Preparing early is the key to the most seamless loan process possible. Are you ready to start exploring your options? Or are you just getting started with your credit reports, debt-to-income ratio, budgeting for the down payment and closing costs, etc.? Ask Yourself The Right Questions About Your FHA Home Loan How long have you been planning and preparing for the new loan? This is a very important question–without enough time to sort out potential problems on your credit report (identity theft, outdated information, incomplete or wrong details, etc) or | more...

 
FHA Home Loan rules for closing costs

FHA Loan Rules And Mortgage Closing Costs

FHA home loan rules for mortgage closing costs include a requirement that down payment funds come from approved sources, but there are plenty of other guidelines for the money you’ll need to pay at closing time. There are three basic categories when it comes to your home loan closing costs, some of which are subject to change. Some costs are fixed, and some can be increased by the lender depending on whether or there is a change in circumstances that affects the borrower’s credit rating, if there is a change in the down payment, or even the type of home loan (see below). When And How Closing Costs May Change There are certain rules that allow your lender to alter your closing costs. Under the right circumstances, those costs may | more...

 
FHA Home Loan Rules For Verifying Your Credit History

FHA Loan Guidelines For Verifying Your Credit History

FHA loan rules have a lot to say about what the lender needs to look for to verify a potential FHA borrower’s creditworthiness. No matter if you are looking for a condo loan, a mobile home loan, or you want to build a house on your own land with an FHA construction loan, the requirements in the FHA Lender’s Handbook are identical. There are minimum FICO score requirements, instructions to the lender for reviewing the borrower’s record on-time payments (12 months of reliable payments on all financial obligations is strongly recommended), and much more. One area that is also covered in HUD 4000.1 is what the lender should do if collections are included in borrower’s credit history. The presence of a collection action on a loan applicant’s record may be | more...

 
FHA Loan Rules For Appraisals: Appliances, Mechanical Systems In The Home

FHA Loan Rules For Appraisals: Appliances, Mechanical Systems In The Home

HUD 4000.1, the FHA Single-Family Loan Handbook, has a detailed section about FHA loan appraisal requirements. First-time home buyers may not realize that certain details of the home must meet FHA requirements such as the condition of appliances and the efficiency of the mechanical systems in the home such as central air conditioning or hot water heaters. HUD 4000.1 lists FHA requirements for appliances in the appraisal, stating that the FHA appraiser is required to review the home’s stove, fridge, washing machine, etc. if those appliances are being left in the home for the new owner. “Appliances that are to remain and that contribute to the market value opinion must be operational. ” This section is discussing appraisals for existing construction homes, but the intent is clear; the condition of | more...

 
FHA Home Loan Down Payment Help For Borrowers

FHA Loan Down Payment Help For Borrowers

Even with the FHA loan program’s low 3.5% down payment requirement, some borrowers struggle to come up with the minimum required investment for the purchase of an existing home or construction of a new home. Fortunately, there is home loan down payment assistance available for borrowers from local agencies (the FHA itself does not provide down payment funds) and there are resources you can search to find the down payment help you need in your local area. But there are rules for down payment grants, home buyer grants, and other forms of down payment help. FHA loan rules say any down payment help must meet FHA requirements and must not be used in ways that are against the rules. For example, some well-intentioned groups may offer down payment funds to | more...

 
Does The Fed Interest Rate Cut Also Cut Mortgage Loan Rates?

Does The Fed Interest Rate Cut Also Cut Mortgage Loan Rates?

On Wednesday, October 30 2019, the Fed voted to cut interest rates for the third time. The specifics, reported by many news outlets including CNBC.com, include a 25 basis points cut to the benchmark funds rate. According to a CNBC report, ” The rate sets what banks charge each other for overnight lending but is also tied to most forms of revolving consumer debt.” Some want to know if the Fed rate cut directly equals a cut to mortgage loan insurance rates for FHA loans, VA mortgages, USDA loans, or conventional mortgages. The short answer is no, it does not. But that does NOT mean an interest rate cut won’t affect your mortgage rate if you are not currently in a rate lock commitment with your lender. The rates cut | more...