January 26, 2020

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Articles in Category: FHA Loan Basics

FHA Home Loans and Your Income: 5 Tips

Home Loan Approval And Your Income

Home loan approval means submitting your employment and income information to the lender, who must verify the information for accuracy. There are things you can do to help the process work in your favor if you know about certain nuances of the home loan approval process. Important Takeaways From This Article: Know how the lender checks your income data; Study the FHA home loan rules for employment and income, especially if you are self-employed, a commission earner, or a contractor; Know how frequent job changes may affect your loan; Shop around for a loan even if you think you’ve found a good bank; Know How The Lender Operates Some people mistakenly assume that income and employment verification are formalities; they are not. Your lender is required by law to carry | more...

 
Buying A Home With An FHA Loan: Should You Skip The Home Appraisal?

Do You Need To Apply For An FHA Mortgage?

Do you need to apply for a home loan to buy real estate in 2020? FHA mortgages feature a low minimum down payment, allow seller contributions to closing costs, and even permit down payment assistance from approved sources. What does it take to apply for an FHA mortgage? You will need proof of income, tax records, and bank statements. Borrowers also need to have a credit history of some kind, even if non-traditional. FHA loan rules allow non-traditional credit, but lender standards will be very important. FHA Loan Approval Requirements FICO scores between 500 and 579 for a 10% down payment, or FICO scores at 580 or higher for the lowest down payment of 3.5%. You will also need 24 months of employment history as a general rule, and you | more...

 
Mortgage Loan Interest Rates: What You Need To Know About Trends

Mortgage Loan Interest Rates: What You Need To Know About Trends

What should borrowers know about mortgage loan interest rate trends? Especially when those trends are pushing rates toward historic lows? It’s a very good idea to be aware of the forces that affect mortgage rates; understanding how they work is a step toward making a more informed purchase as a house hunter or first-time home buyer. Interest Rate Trends Are Affected By The Economy What is good for the economy is often bad for mortgage loan interest rates, and vice versa. You will see rates pushing higher when there is good economic news, and rates trend lower when there is bad economic news. Except when they don’t. The thing to remember about mortgage loan rates is that no single factor affects them; it’s a combination of things and sometimes interest | more...

 
FHA Appraisal Rules You Need To Know

FHA Appraisal Rules You Need To Know

Are you a first-time home buyer? Are you looking into your FHA home loan options and not sure what the appraisal process is all about? The FHA appraisal is a tool for the lender to determine the home’s fair market value and a way to make sure a property meets MINIMUM standards. No matter what you might hear (and some mistakenly call the appraisal an “inspection”) the appraisal will not tell you the true condition of the home. Even the FHA and HUD themselves warn borrowers to pay for the optional home inspection (which is technically not a requirement, but then again, neither is test-driving your car before you buy it). And what should borrowers know about the FHA appraisal process? The appraisal’s most important feature for some borrowers is | more...

 
Do you want to buy a house this year?

Questions A First-Time Home Buyer Should Ask The Seller

First-time home buyers and those who have purchased a home before but haven’t had to explore housing markets in a while should make a list of questions to ask the seller of a home placed on the real estate market. Sometimes it’s not the answer to the questions as much as the way the seller answers those questions-your ability to ask important questions in those cases is important, but so is paying attention to how the questions get answered. For example, the question, “Has the roof ever been replaced or repaired?” may get you a direct answer; “No, nothing has ever gone wrong with the roof”. But if the seller hesitates or offers a less-than-forthcoming answer, such as, “I don’t remember anything going wrong with the roof” or “No, the | more...

 
FHA Mortgage Rates For The Rest Of 2019

FHA Loan Appraisal Issues: Environmental Concerns

The FHA appraisal requires attention to a variety of areas in and around the home, but one aspect of the appraisal has to do with assessing safety hazards and environmental issues that could interfere with the borrower’s ability to use the home. In the case of these FHA appraisal rules, the term “environmental” refers specifically to the areas in and around the home. HUD 4000.1, the FHA loan handbook, begins addressing these concerns by instructing the lender: “The Appraiser must report known environmental and safety hazards and adverse conditions that may affect the health and safety of the occupants, the Property’s ability to serve as collateral, and the structural soundness of the improvements”. Such hazards can include lead-based paint, mold, chemicals, and other hazards. One recent addition to the HUD | more...

 
FHA Cash-Out Refinance Loans: Common Questions

FHA Appraisals Versus Home Inspections: Facts You Should Know

We write about FHA home loans, the FHA appraisal process, and why the appraisal should never be used in place of a home inspection to determine the condition of the home. Borrowers who do not personally arrange for a home inspection and rely on the results of the FHA appraisal alone put themselves at serious risk of buying a home that has hidden problems. Because lenders and other industry professionals sometimes use the term “inspection” when referring to the appraisal, borrowers may assume that the appraisal really IS an inspection (which is more in-depth than an appraisal). But this is not true. Here’s one example why you should not rely on the FHA appraisal to tell you the condition of the home; HUD 4000.1 includes appraisal requirements. Here’s a passage | more...

 
FHA Loan Rules For Appraisals: Appliances, Mechanical Systems In The Home

FHA Loan Facts

When you start doing research on home loans and want to learn what it takes to qualify for an FHA mortgage loan as either a first-time home buyer or as a return borrower, you will find websites with lists of loan approval requirements. Some of those FHA home loan approval requirement lists look like this: A credit score of 580 or higher for the lowest down payment A debt-to-income ratio of 43% or less 3.5% down payment 1-2 years of consistent employment history A property that meets FHA standards OR A home eligible for FHA 203k rehab loan financing You may find a caveat on lists like these stating that they are “general guidelines” and that is true. What isn’t always included in those caveats is that additional lender standards | more...

 
Closing Day On Your FHA Home Loan

FHA Home Loans For Millennials

How young is too young to buy a home? Millennials are taking over as the largest group of home buyers in the United States, but some wonder whether they are able to qualify. What does it take to qualify for an FHA mortgage? Are There Age Restrictions On FHA Home Loans? FHA loans do require all borrowers to be of sufficient legal age to sign legally binding contracts. But aside from that, there are no real age limits for FHA mortgages with one exception. The FHA Reverse Mortgage, which lets qualified borrowers convert the equity in a home they own outright into cash, is limited to borrowers aged 62 or older. But for forward FHA mortgages to purchase a home, as long as the borrower is otherwise qualified and of | more...

 
Do you need to

House Hunting Advice For First-Time Home Buyers

When you start making plans to work with a realtor, there are some very good things to consider ahead of time. Checklists, online mortgage calculators, and other home buying tools are only some of the things you’ll want in your house hunting toolkit when you are ready to become a home owner. Decide What Your Priorities Are For Your New Home Before you ever fill out FHA home loan paperwork, and long before you decide which real estate agent to work with, you should have an idea of what your main priorities are for your new home. Do you need a home located near a certain school or type of school? Are you looking for some place quiet and residential and nowhere near a shopping mall, gas station, or movie | more...