April 27, 2018

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Articles in Category: FHA Requirements

FHA Home Loan Approval Rules: Work History

FHA Loan Approval Rules: Work History

Whether you seek an FHA One Time Close construction loan or want to buy an existing-construction home, the FHA guidelines for loan approval require your lender to verify your employment and income history. How much time will the lender require you to be on the job in order to get your mortgage loan approved? That standard will vary from lender to lender, so you will need to discuss work history requirements with your loan officer. However, at a minimum, FHA loan rules require the lender to verify two years of work history. That work history does not have to be with the same company. FHA Loan Rules For Income Verification Along with your recent work history, the lender is also required to verify the income you report to the lender | more...

 
FHA Home Loans: Facts You Should Know Before You Buy

FHA Home Loans: Facts You Should Know Before You Buy

FHA loan facts you should know before you buy include a variety of concerns, one of which is an optional issue some borrowers choose not to address until it is too late. Don’t make the same mistakes as some first time home buyers-the money you save could be significant. Never Buy A Home Without A Home Inspection It’s important to point out that the headline for this section does NOT read “Never buy a home without an appraisal”. FHA appraisals are a mandatory part of the home loan process, but inspections are on the borrower to arrange, pay for, and review. Home inspections are the only way a borrower can make a truly informed purchase. Those who rely on the appraisal alone for any new purchase mortgage do so at | more...

 
Low down payment FHA home loans

Low-Down Payment FHA Home Loans

Compared to some non-FHA mortgages, FHA home loans feature low down payments-as little as 3.5% of the adjusted value of the property for financially qualified borrowers. FICO scores and other credit data will play an important part in the required down payment-if your FICO score is too low the lender may require 10% down (lender standards will vary), but financially qualified borrowers should expect 3.5% down and budget for the down payment accordingly. One type of FHA home loan may not require any down payment at all, depending on circumstances, as we’ll read below. FHA Loan Down Payment Requirements: FHA Loan Assumptions FHA loan assumption rules permit the home owner to allow another person to assume the mortgage loan-the house and the debt are signed over to someone else, with | more...

 
FHA Home Loan Options: Build, Buy, Or Rehab

FHA Home Loan Options: Build, Buy, Or Rehab

Build, buy, or rehab? Those are among the options open to FHA home loan applicants. Do you know what is possible with an FHA mortgage loan? The options range from purchasing an existing 1-4 unit home to having a single-family house built from scratch using an FHA One Time Close construction loan. FHA Home Loans: The “Forward Mortgage” “Forward mortgage” is a fancy way of describing the new purchase loan-an FHA mortgage that will help you buy a home. “Forward mortgages” are described as such to distinguish them from Home Equity Conversion Mortgages (HECM) or as they often called, Reverse Mortgages. A forward mortgage can include purchase of land and funds for a construction phase when an FHA One Time Close loan is being used to build to suit. FHA | more...

 
FHA Refinance Home Loans: Getting Ready

FHA Refinance Home Loans: Getting Ready

Do you know what you need to get ready for an FHA refinance home loan application? There are several areas you can prepare in before it’s time to sign the loan application paperwork. Check Your Credit Reports-EARLY FHA refinance loans should be treated in the same way your original home loan application was handled in terms of checking credit, avoiding new lines of credit before and during the refinance loan process, and trying to lower your debt ratio before the application. Decide The Right Refi Loan For You Your preparations for the new loan may depend greatly on the type of FHA refinance loan you are looking for; cash-out, no cash out, Streamline Refinancing, rehab refi loan, etc. How are these loans different? There are too many aspects to discuss | more...

 
FHA Home Loan Down Payment Sources: Retirement Funds and More

FHA Loan Down Payment Sources: Retirement Funds

We’ve been discussing FHA home loan down payment sources and the rules that govern them. FHA mortgage loan rules in HUD 4000.1 have strict requirements when it comes to the sourcing of down payments; since most FHA forward mortgages require a down payment, the rules in this area are very important to know ahead of your loan application. FHA Loan Down Payment Source Rules: Retirement Funds FHA loan rules permit the borrower to use retirement funds as a source of down payment money. According to HUD 4000.1: “The Mortgagee may include up to 60 percent of the value of assets, less any existing loans, from the Borrower’s retirement accounts, such as IRAs, thrift savings plans, 401(k) plan, and Keogh accounts, unless the Borrower provides conclusive evidence that a higher percentage | more...

 
Where can my FHA loan down payment come from?

Where Can My FHA Loan Down Payment Money Come From?

Where can my FHA loan down payment money come from? It’s an important question to ask, and some borrowers might not understand the difference between closing costs that are not part of the down payment compared to what is allowed to be counted toward it. FHA Loan Down Payment Requirements For most forward FHA mortgages, the down payment requirement includes a minimum of 3.5% of the adjusted value of the home. Some FHA home loans such as refinance mortgages don’t require a down payment; FHA rehab loans for those in Federally declared disaster areas are not required by the FHA to make a down payment regardless of whether the rehab loan is a forward mortgage or a refi. Is My Up Front Mortgage Insurance Premium Part Of My Down Payment? | more...

 
Switching FHA Lenders, Part 2

Switching FHA Lenders, Part 2

In our previous blog post, we discussed borrowers who need to know FHA home loan rules for switching lenders, and when a new appraisal might be permitted under such circumstances. Borrowers do have the right to change lenders, the same way they have the right to refinance a mortgage loan using the same lender or a new one. If you need an FHA One Time Close construction loan, appraisal issues are quite different. The FHA will require inspections of the finished property to insure it complies with FHA standards and state/local code, but obviously the approach to a new construction home isn’t the same as an actual appraisal to determine the fair market value of existing construction properties. But for those who need a new purchase loan on an existing | more...

 
What you need to know about switching FHA lenders

What You Need To Know When Switching FHA Lenders

There are several reasons why a borrower might decide to switch FHA lenders during a home loan transaction. In cases where the switch happens, borrowers should know certain FHA guidelines that can affect the transaction-especially if an appraisal has already happened. Some borrowers think about switching lenders because they have had an unsatisfactory experience. Others may simply be offered a better deal. But there are some instances where the borrower is tempted to switch lenders because of an appraisal issue-namely that the appraisal did not value the property as expected. In such cases, when a borrower is tempted to get a new lender and a new appraisal, what should be known about that process? The first thing borrowers should know is that new FHA appraisals are not possible simply because | more...

 
FHA Home Loans For New Construction, Existing Construction Homes

FHA Home Loans For New Construction, Existing Construction Homes

FHA home loans are available for a variety of different types of property. You can use an FHA mortgage to buy a typical home in the suburbs, a condo, a town home, mobile or manufactured homes, etc. FHA home loans are also for properties classified in one of several ways; existing construction, new construction, proposed or under construction, etc. What do these terms mean and how does the property type affect the FHA home loan? In some cases the nature of the property may dictate whether a builders’ warranty must be provided. New construction homes, for example, must include a 10-year warranty. This is true for all property types that fall under the FHA definition of new construction property including proposed construction homes, under construction homes, and those that have | more...