Articles in Category: FHA Guidelines

August 29, 2023

Asking Your Lender For A Better Interest Rate

Mortgage rates are hovering in the 7% range, and there’s no end in sight (at least in 2023) to the higher interest rates reported at the time of this writing. What is a borrower to do when faced with higher rates and the need to purchase a home? There are ways you can get a lower mortgage rate, including buying discount points (used to reduce the mortgage loan rate), improving your FICO scores ahead of your loan application, and considering an adjustable rate mortgage. But there’s another way you can get a lower rate. It’s a twofold process. You must shop aggressively for the lender who offers you the lowest rate, and then when the lender informs you what that rate might be, ask what steps might be taken to | more...

August 22, 2023

How Much Will My FHA Appraisal Cost?

By Bruce Reichstein

How much does an FHA appraisal cost? This is a common question, most often asked in conjunction with whether or not the FHA regulates this expense as part of the FHA home loan process. The Cost Of FHA Appraisals And Home Inspections The first thing to remember when budgeting for an FHA appraisal is that you must also set aside money for a home inspection. You should never rely on the appraisal alone to determine whether the home, condo unit, or mobile home or modular home is suitable to purchase. The FHA appraisal costs money, and the home inspection costs money too. Borrowers who balk at paying “twice” for a service that is mistakenly viewed as nearly identical (appraisals are NOT identical to inspections) should know that paying hundreds for | more...

June 26, 2023

Is It Possible To Have Multiple FHA Loans?

By Joe Wallace

Many people want to know if they can apply for more than one FHA loan at a time. In some cases this is because the potential borrower wants to buy a home they don’t intend to use as their primary residence. In others, the issue might be that a larger home is needed due to a change in family size. Are these reasons for having more than one FHA loan valid under FHA loan rules? What FHA Loan Rules Say FHA loan rules for the single-family home loan program in the FHA Single-Family Handbook generally permit FHA loans only for owner-occupiers. The short answer to the question, “How many FHA loans can I have at the same time?” is ONE. The home must be occupied by at least one person | more...

Conventional Loan Interest Rates Make History, FHA Loan Rates Still Incredibly Low

June 15, 2023

FHA Loans and Interest Rates: The Interest Rate Lock

By Joe Wallace

Under the rules of the FHA loan program, borrowers and lenders negotiate together on interest rates for the FHA loan. Part of those negotiations is the interest rate lock agreement. This can feel intimidating for some who aren’t used to the home-buying process, but it’s a common part of the home loan transaction. What do you need to know about FHA home loan rates and getting a rate lock commitment from your lender? The FHA does not set interest rates, and it’s also not responsible for regulating them aside from a general requirement that the rates be comparable to similar types of loans. Interest rates on mortgages and other high-value transactions are under more scrutiny in 2023 due to continued elevated mortgage rates. At the moment, it’s good to explore | more...

May 16, 2023

FHA Home Loan Numbers You Need To Know

By Joe Wallace

What numbers do you need to know when researching your options for an FHA mortgage? The amount of your down payment, mortgage insurance, and how much your seller may contribute toward your closing costs are all important to know in your new mortgage’s planning and saving stages. FHA Loan Numbers: Down Payments FHA loan rules say if you come to the application process with FICO scores at 580 or above you can make the lowest down payment; 3.5% of the price of the home. FHA loan rules say those with FICO scores between 500 and 579 must put down 10%. As you can see, it pays to work on your credit well before your loan application. FHA Loan Numbers: Appraisal Fees There is no set national price for appraisal fees, | more...

April 19, 2023

FHA Home Loan Pre-Approval: Issues To Consider

By Joe Wallace

Getting mortgage pre-approval is an important step in the home buyer journey. It indicates to the seller and a lender that you are serious about your home loan and ready to commit to the right property and price. So what should you know about mortgage pre-approval before you apply? Before you start filling out the forms to get pre-approved, there are some basic questions to ask yourself. Getting pre-approved for an FHA home loan means asking yourself how good your credit score is and how high your credit card balances are. It also means looking at your savings and how much you will need to come up with to meet FHA minimum downpayment requirements. It’s best to start asking these questions far in advance of your home loan so that | more...

March 13, 2023

How Do FHA Loan Requirements Work?

By Bruce Reichstein

How do FHA loan requirements work? Do you know what you need to qualify for an FHA mortgage loan or FHA refinance loan? There are important details about FHA mortgage loans that can help you make an informed decision about applying for one. We’ll examine them below. FHA Loans: Lower Down Payment Requirements FHA loan down payment rules say you’ll need a minimum 3.5% down based on the appraised value of the home. You won’t be able to get a zero-down payment FHA mortgage unless you are a qualified borrower applying for an FHA 203(h) mortgage for disaster victims in a federally-declared disaster area. 3.5% down is the minimum cash investment required. Some borrowers with low FICO scores may be required to put down 10% depending on their scores, lender | more...

March 8, 2023

How Do FHA Refinance Loan Requirements Work?

By Joe Wallace

How do FHA refinance loan requirements work? There are myths and misconceptions about FHA refinance loans; knowing how they work can help you decide if an FHA refinance loan is right for you. FHA Loans Are Available From Participating Lenders You will need to find a lender that participates in the FHA loan program to get an FHA refinance loan. You do not have to use your original lender to refinance into an FHA mortgage. More on that issue below. FHA Refinance Loan Requirements For Non-FHA Loans Yes, you can refinance a non-FHA home loan into an FHA mortgage. Refinancing non-FHA loans can be accomplished with FHA cash-out loans or no cash-out loans. You do not have to use your original lender to refinance from a non-FHA mortgage to FHA; | more...

February 3, 2023

Need A Home Loan? Beware Of Escrow Fraud

By Joe Wallace

There are common home loan scams that affect house hunters, even those applying for FHA home loans. One such scam–one you might actually encounter in your home buying journey–is called escrow fraud and it can affect even the most experienced homeowner if they are caught at just the wrong moment. Home Loan Scams Can Affect Any Type Of Mortgage Escrow scams are not associated with FHA mortgages alone, any type of home purchased with any type of home loan could be targeted. An important sense of any successful scam is creating a sense of urgency or emergency or a feeling that a big discount might be missed if you stop to consider the options. The scammer wants you to be in a hurry, not thinking critically, and ready to invest | more...

December 26, 2022

What Are The FHA Loan Rules For Investment Properties?

By Bruce Reichstein

FHA home loans have “approved property” rules found in HUD 4000.1, the FHA loan handbook for Single Family Mortgage loan transactions. These rules include a list of approved uses for FHA mortgages, approved property types, and the kinds of property which can never be purchased with an FHA single-family mortgage. First and foremost, FHA loans are intended for owner-occupiers, which means that FHA mortgages for vacation homes and other intermittent-occupancy purposes are not possible. Borrowers cannot use an FHA loan to open a bed and breakfast or to purchase a timeshare, condohotel or similar property. FHA mortgage loan rules in HUD 4000.1 also state the following, intended to prevent the use of single-family home loans for business purposes: “FHA will not insure more than one Property as a Principal Residence | more...