June 28, 2022

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Articles in Category: FHA Loan Basics

Is your credit ready for an FHA loan?

Things To Look For When Buying A House With An FHA Mortgage

Finding the right home to buy with an FHA home loan can be challenging. If you are a first-time home buyer, do you feel intimidated about making a decision on the size and configuration of the house you want to buy? You are not alone.  Fortunately, you can help yourself in this process by making a checklist of features and priorities you can refer to when reviewing each property. This can be a better approach than trying to do it all from memory; you won’t forget to ask the seller or real estate agent about something important if you have it written down in front of you when you take the tour. What To Look For When Buying A Home With An FHA Mortgage: Overall Size That sounds fairly obvious | more...

 
FHA home loans

FHA Loans And Home Equity

How soon do you need to start thinking about home equity? Believe it or not, you start making decisions about equity right away in the planning and saving process of your loan.  How? The amount of money you save for a down payment is a decision that directly affects the amount of the loan you want. The bigger your down payment, the more potential equity you could start out with. Essentially your home’s equity is the difference between the current market value of the home and how much you owe on the mortgage. That’s one reason why a bigger down payment affects your equity–you’ll start out owning the mortgage amount minus that money down. Since the equity in your home is subject to change, it’s important to pay attention to | more...

 
FHA Loan

Paying Your FHA Loan Off Early

Some of the big differences between an FHA mortgage and conventional loans involve more forgiving credit qualifying requirements, as well as a lower down payment. There is also an FHA loan rule that requires that the borrower have the ability to freely sell or transfer the property in any way he or she sees fit once the mortgage loan has closed and the borrower has started using the home as their primary residence.  But there’s another important difference between some conventional mortgages and FHA loans. Did you know that under the FHA loan program you cannot be penalized or charged for early payoff of the loan? In years past, this guidance was found in HUD 4155.2 Chapter Three, which had a section describing what the FHA terms, “prepayment”. And while | more...

 
FHA Loans

Mortgage Scams: Homeowner Beware!

Have you been contacted by a third party offering to refinance your FHA home loan? During the worst of the COVID-19 outbreak, there were reports about home loan scammers trying to trick people into applying for refinance loans, mortgage relief, and foreclosure avoidance measures that weren’t what they were advertised to be. Some fell prey to these scams, while others relied on “best practices” to help them avoid being fooled into thinking they might be dealing with a legitimate third party offering help.  What are these best practices and how can you save your home from loan default and/or foreclosure or simply refinance your existing home loan without getting swindled? The first key is the nature of the contact with you, the homeowner. Did you initiate it or did it | more...

 
FHA loan

FHA Home Loans And Closing Day Delays

Getting to your closing day can be challenging. There are fees and expenses to pay for, credit checks to submit to, negotiations with the seller, and more. And on top of all those details, there are issues that could slow down your home loan, and may in some cases even affect your closing day.  Don’t assume that such issues are always the borrower or seller’s fault. There are many reasons why your closing day could be delayed or otherwise affected by circumstances. What Can Delay Closing Day?  Many issues can affect your ability to close the loan. For example, what if the appraisal comes back with corrections or with a value that is lower than the asking price of the home? Those things may or may not require a rethink | more...

 
FHA

Answers To New House Hunter Questions

What does it take to qualify for an FHA mortgage? That’s among the most common questions asked about FHA home loans. What is the answer?  There are a variety of factors that go into your loan officer’s decision to approve or deny a home loan. Those factors include the number and amount of your monthly financial obligations, your FICO scores, how well you use the credit you have, and other variables. What credit score do you need to qualify? On paper, FHA loan rules say those with FICO scores in the 580 or above range qualify for the lowest down payment possible for an FHA mortgage (3.5%). Lender standards may require a higher FICO score range. Not all borrowers have the same kind of FICO scores. Some may have thin | more...

 
FHA Mortgage Loan

What Can I Buy With An FHA Loan?

What is possible with an FHA home loan? If you don’t know all your options, you might be surprised to learn you can use an FHA mortgage to buy a house with as many as four living units, manufactured home or modular home, and even a condominium unit. There are some things you cannot use an FHA mortgage to buy, we’ll examine some housing types below: Suburban Houses, Duplexes, And Townhomes FHA loans can be used to buy a one-to-four unit property in a typical neighborhood that is primarily residential and a house where you plan to live as your home address. A duplex or townhome is eligible for an FHA mortgage if the property meets minimum standards, the same as a single-bedroom home or a condo. Repo Homes And | more...

 
FHA loans

FHA Appraisals: What To Remember

The FHA appraisal is one of the most important pre-closing day aspects of your home loan process.  Without an appraisal, your lender can’t know if the home meets minimum basic standards for safety, remaining economic life, and serviceability. The lender also can’t make a realistic judgment about the fair market value of the home without an appraisal. What should you know about this process and how it affects you? FHA appraisals are a tool for the lender and not a tool for the borrower. You may be privy to the results of the appraisal, but that does not mean it was designed to help you as a borrower. It is not meant to tell the borrower anything actionable, especially where the condition of the home is concerned. That is the | more...

 
Five FHA Home Loan Questions To Ask Your Lender

FHA Home Loan Issues For Veterans

Veterans interested in buying a home have many choices including a VA home loan, but also FHA loans that function in much the same way as their VA counterparts. While it is true that VA loans require no down payment in most cases but FHA home loans always require one in most cases, some veterans explore their FHA loan options just the same. Some want existing construction loans, others want a One Time Close mortgage to build a suitable home from the ground up. One Time Close mortgages are available in both VA and FHA versions, so military and veteran borrowers have options with either type of mortgage. But some military members and veterans may enter the service after already having purchased a home, or after having assumed an FHA | more...

 
FHA and HUD

Appraisals Vs. Home Inspections: What You Need To Know

Can you buy a house relying on the appraisal alone to tell you about the home’s condition or should you shell out the money to pay for a home inspection? That’s a question more than one home buyer has answered in the wrong way. Here’s one version of a very common question asked about FHA home loans, appraisals, and the inspection process.  “I bought a house and I am discovering major problems and code violations. I did not have a home inspection and was told the FHA does its own inspection. Can you explain why the FHA inspection did not find these violations of code?” To start, the FHA does not inspect homes and you should not expect the FHA appraisal process to be anything more than what it is | more...