August 20, 2017

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Articles in Category: FHA Requirements

Can my seller pay some of my closing costs?

Can My Seller Pay Some Of My Closing Costs?

Can my seller pay some of my closing costs? The basic answer is, “yes, within certain limits.” FHA loan rules permit certain expenses to be negotiated between buyer and seller, including the contribution of allowed costs. How does it work? FHA Loan Rules For Interested Party Contributions HUD 4000.1, the FHA loan handbook, defines “interested parties” as “sellers, real estate agents, builders, developers or other parties with an interest in the transaction”. HUD 4000.1 states that such interested parties are permitted to offer payments on “origination fees, other closing costs and discount points” within the bounds of FHA loan rules (more on that below), state law, and lender standards. What Payments Can An Interested Party Contribute? HUD 4000.1, page 232, states that an interested party or parties may contribute towards | more...

 
What Kind Of Home Can I Buy With An FHA Mortgage?

What Kind Of Home Can I Buy With An FHA Mortgage?

What kind of home can you buy with an FHA mortgage? The answer isn’t what some people expect, likely due to a misunderstanding of the FHA loan program, who it is intended for, and why it exists. A good example of this? The assumption that FHA mortgages are primarily for first-time home buyers or the economically disadvantaged. Such assumptions are not true. FHA loans are for any financially qualified applicant, which means you don’t have an income threshold to meet, there are no restrictions on those who have purchased homes before, and there is no income maximum. What kind of home can you purchase with an FHA mortgage? FHA loans permit the purchase of homes which are primarily residential, have no restrictions of resale, and which meet FHA minimum standards | more...

 
What kind of FHA loans are available?

What Kind Of FHA Loans Are Available?

What kind of FHA loans are available? This is an important question because it’s good to know what is not possible with an FHA mortgage as well as the options available to you. For example, some ask if an FHA loan can be used like a personal loan-is it possible to buy a home with an FHA mortgage but apply for more money than you need to complete the transaction? The answer in this case would be no, because FHA loan rules do not permit cash back to the borrower in that way at closing time, refunds excepted. So what can you do with an FHA mortgage loan? FHA Loans For Single Family Residences FHA home loans are intended for owner-occupiers. That means if you buy a property with an | more...

 
What does my FHA lender look for in my credit report?

What Does My FHA Lender Look For In My Credit Report?

What does my FHA lender look for in my credit report? That is a very good question to ask, and the earlier in the home loan planning stages you ask, the better off you’ll be. It’s highly recommended that home loan borrowers get copies of their credit reports in the year leading up to a home loan application. You want to know what your credit history says about you before you submit that information to your loan officer. FHA Loan Rules For Credit Reports Your lender is required by the FHA loan program to pull your credit reports, and to use “traditional” credit reporting wherever available. Some borrowers do not have credit, or have non-traditional credit histories. According to the FHA loan handbook, HUD 4000.1, the lender is required to | more...

 
Is my credit good enough for an FHA home loan?

Is My Credit Good Enough For An FHA Home Loan?

Is my credit good enough for an FHA home loan? Borrowers need to know what FHA loan minimum credit standards are, but they will also need to find out what their participating lender’s credit requirements are above and beyond FHA loan minimums. FHA Minimum Standards For FICO Scores The FHA loan handbook, HUD 4000.1, lists the criteria the FHA requires to qualify for a home loan. For most FHA mortgage loans, borrowers who have FICO scores of 580 or higher qualify for maximum financing with the lowest down payment possible (3.5% of the adjusted value of the home or the purchase price, whichever is lower). Borrowers with FICO scores between 500 and 579 may technically qualify for an FHA mortgage, but with a minimum 10% down. Borrowers with FICO scores | more...

 
Can I Get A Second FHA Appraisal?

Can I Get A Second FHA Appraisal?

Can I get a second FHA appraisal? There are a few reasons why a borrow might feel motivated to ask that question, but in many cases it could be due to a disagreement about the outcome of the original FHA appraisal. Ordering A Second FHA Appraisal FHA loan rules in HUD 4000.1, the FHA single-family home loan handbook, clearly state the FHA’s position on ordering second appraisals due to a dispute over the outcome. “The Mortgagee is prohibited from ordering an additional appraisal to achieve an increase in value for the Property and/or the elimination or reduction of deficiencies and/or repairs required.” That is simple enough. However, there may be situations where one party to the loan feels that the appraisal was not done competently or that the appraisal is | more...

 
What should I know about FHA appraisals?

What Should I Know About FHA Appraisals?

What should I know about FHA appraisals? There are many factors to remember about the FHA appraisal process, and not all of them have to do with the act of doing the appraisal; borrowers need to know how the appraisal fits into the overall process of applying for an FHA loan and getting loan approval. FHA Appraisals Are A Typical Expense The appraisal fee is a standard part of a home loan’s fees and expenses, and borrowers should save money for both the appraisal and the possibility of additional fees that could be required depending on the outcome (more on that issue below). Borrowers should keep in mind that the home loan cannot be approved without the results of the appraisal, so it’s best to come to the loan process | more...

 
Who sets FHA loan interest rates?

Who Decides FHA Loan Interest Rates?

Who sets FHA loan interest rates? The answer to that question involves several factors-many potential FHA borrowers asking this question really want to know more than who the regulatory body is for FHA loan interest rates-they also want to know how rates are affected by other factors such as FICO scores and credit history. So who DOES set FHA mortgage loan interest rates? According to the FHA/HUD official site, in general interest rates are set by the Federal Reserve Board. Furthermore, “HUD does not regulate the interest rate or the discount points that may be paid by you or the seller or other third party.” The official site adds, “You should shop around to be sure you are satisfied with the loan terms offered and with the service reputation of | more...

 
Where can I get an FHA loan?

Where Can I Get An FHA Loan?

Where can I get an FHA loan? There are plenty of options when you are ready to begin your journey to become a home owner-you can apply in person, or get pre-qualified or apply online. How does it all work? Who Offers FHA Home Loans? FHA mortgages are offered by participating lenders who have been approved by the FHA to offer FHA mortgages, refinance loans, FHA Reverse Mortgages, and rehab loans. The FHA itself does not loan the money for you to purchase your home. The FHA may require the lender, depending on circumstances, to work with the FHA to approve certain home loans, but many FHA lenders have earned the right to offer loans “unsupervised”, meaning they have met standards that permit them to make decisions on loan approval | more...

 
What Is Undisclosed Debt?

FHA Mortgage Questions: What Is Undisclosed Debt?

What is undisclosed debt and how can it affect your FHA home loan application? Undisclosed debt is basically credit information that is either not listed by the borrower on the credit application, or debt that does not show up yet on a credit report. There are several reasons why a lender would be concerned by undisclosed debt and FHA loan rules anticipate situations where such problems occur. Undisclosed Non-Mortgage Debt FHA loan rules for this type of debt which is not volunteered by the borrower on a mortgage application (or does not show up on the borrower’s credit report) are found on page 187 of the FHA loan handbook, HUD 4000.1. There we find these instructions to the lender: “When a debt or obligation (other than a Mortgage) not listed | more...