Articles in Category: Closing Costs

Protect Your Credit During The COVID-19 Emergency

July 14, 2021

How Much Will My FHA Home Loan Be?

How much will my FHA home loan be? That is a question many borrowers want to know, and the answer can be more complicated than just taking the sale price of the home and doing the math. FHA home loan maximum amounts are determined by factors including the maximum FHA loan guaranty for the housing market you are buying the home in, your credit history, the amount of your down payment, and more. The final amount of your FHA mortgage loan is affected by your down payment, the FHA loan limit in your area, and other factors. FHA Home Loan Limits FHA home loan limits are not the same in all housing markets. Some parts of the country are considered low-cost areas and have a lower FHA loan guaranty limit | more...

July 13, 2021

FHA Loan Down Payment Facts

By Joe Wallace

Some borrowers get nervous about having to come up with a down payment. It is more than some have spent on one thing in their adult lives all at once, who can blame them for worrying? FHA home loans permit down payment gifts and grants and that can be a huge help for the first-time homebuyer. The rules for these programs must clearly explain the conditions of the grant or gift, under what conditions it might be required to be paid back–those payback terms of often triggered by violating the terms of the agreement. It can also happen when the home is sold, paid off, or no longer used as the primary residence. Such gifts may come from state or local housing development agencies or other local entities–remember that the | more...

July 2, 2021

Down Payment Help For Your Home Loan

By Bruce Reichstein

If you need a home loan but worry about the down payment, you may be able to take advantage of state-run or locally operated down payment assistance programs in your area. The FHA home loan program itself does not offer down payment assistance so you will need to find a local program that can help. What should you know about down payment assistance programs? For a start, these programs can be used with an FHA mortgage to purchase an owner-occupied single-family residence. In some cases you may be able to purchase a home with more than one living unit, but occupancy is a requirement both for the FHA loan program for single families as well as many down payment assistance options. For FHA loans, the minimum required 3.5% (of the | more...

June 8, 2021

What To Do If You Need Down Payment Assistance

By Bruce Reichstein

Some borrowers worry that they can’t save up enough money for their home loan down payment. Fortunately, many states feature programs that can help these borrowers who may otherwise qualify for an affordable home loan but struggle with their down payment requirement. If you are considering an FHA mortgage but need down payment help, there are programs offered by state and local agencies that may be able to help you soften the economic blow of that 3.5% down payment requirement imposed by the FHA. Not all down payment assistance meets FHA loan guidelines–you’ll need to make sure that whatever the source of your down payment assistance, you meet the sourcing requirements for the money. That means having a clear paper trail from the person providing your down payment assistance. Your | more...

June 4, 2021

FHA Home Loan Down Payment Assistance

By Bruce Reichstein

Do you worry about making a down payment on a home loan? There are home loans that require higher down payments than others but the FHA loan program requires only 3.5% down for borrowers with qualifying FICO scores. FHA loan rules in HUD 4000.1 say: Borrowers with FICO scores at 580 or higher qualify for the lowest down payment. Borrowers with FICO scores between 500 and 579 are required to put 10% down. These are FHA guidelines, not individual lender standards. FHA home loans don’t have a zero down payment option, but FHA construction mortgages allow the borrower to use land equity as part of the down payment where applicable. But borrowers don’t always have to make the downpayment themselves thanks to down payment assistance programs that can help. Here | more...

Gathering Your Home Loan Documents And Preparing For The Application

May 12, 2021

Down Payment Sources: The Rules

By Joe Wallace

Are you struggling to save enough money for a down payment for a home loan? It’s tempting to turn to quicker sources of funds for that minimum required investment, but FHA loan rules say some potential sources for down payment money cannot be used. Those prohibited sources include considering cash advances from a credit card, payday loans, and certain other sources for a larger sum of money that can be used for a down payment including down payment “gifts” that actually have an expectation of repayment. The guidelines that cover these downpayment issues are found in HUD 4000.1, also known as the FHA Lender’s Handbook. The rules? For any type of FHA loan that requires a down payment (a new purchase loan, an FHA One-Time Close construction mortgage, condo loan, | more...

March 20, 2021

Buying Land With An FHA Loan

By Bruce Reichstein

There are several reasons why a house hunter looking for a home to purchase with a VA mortgage might want to buy a piece of land. In times when the housing market is favorably inclined towards new construction loans, some buyers might want a government insured loan for a proposed construction or new construction purchase; others might want to buy a piece of land for a manufactured home or mobile home.

March 17, 2021

FHA Home Loan Down Payments

By Joe Wallace

Most home buyers will make some form of down payment, with exceptions for those using VA mortgages with no money down for qualifying servicemembers, veterans, and surviving spouses. There are also no money down USDA loans but these are need-based and have income caps. By comparison, FHA mortgages with their low 3.5% down payment requirements are attractive to many house hunters who want to save more money up front on the mortgage. Do You Really Have To Put 20% Down? Some borrowers may hear stories of borrowers being required to pay 20% down. This would be true in cases where the home buyer wants to avoid mortgage insurance on a conventional mortgage. And while that is not the only down payment option offered in such cases the mere idea of | more...

November 20, 2020

FHA Home Loan Up-Front Costs

By Bruce Reichstein

The amount of planning and saving time you give yourself ahead of your home loan application is very important. Without enough lead time to save for your up front costs and prepare your credit you may fill out an application without being truly ready. And part of being ready is understanding what costs you may be responsible for up front. Do you know what to anticipate needing to have saved for your new loan? There are two important areas to begin with–your down payment, and the FHA Up-Front Mortgage Insurance Premium which is part of your closing costs. Both the down payment and the UFMIP calculations require at least a rough estimate of what the asking price of the home and/or the amount of the mortgage might be; you can | more...

August 21, 2020

FHA Loan Down Payment Rules

By Joe Wallace

One of the biggest worries for some borrowers interested in buying or building a home? The down payment. At the time of this writing, there are only two zero-down payment mortgages offered nationally by participating lenders offering government-backed mortgages; the VA mortgage and certain USDA single-family home loans. USDA home loans are need-based mortgages with income caps and purchase price limits; VA mortgages are only for those with qualifying military service and certain surviving spouses of those who have died as a result of military service. For FHA mortgages, there is no need-based requirement and you do not have to be a veteran OR a first-time home buyer to apply for an FHA mortgage. FHA loans are offered to all who financially qualify with no income limits. FHA down payment | more...