Articles in Category: FHA Loan Basics

What Credit Score Is Needed For An FHA Mortgage?

December 7, 2018

How FHA Home Loan Appraisals Differ From Home Inspections

If you are serious about buying a particular home with an FHA mortgage loan, one of the big steps in the process heading toward loan approval is the FHA appraisal. The appraisal process and the home inspection are not the same thing, do not address the same concerns, and are intended for different users. What are these differences and why should you as the house hunter care about them? FHA Appraisals Are A Lender’s Tool The home that is appraised by an FHA fee appraiser does so in service of the lender, not the borrower. The lender is interested in knowing that the home meets minimum FHA standards and applicable building codes. The lender is also interested in setting a fair market value for the home; that is done by | more...

November 7, 2018

What Is An FHA Loan?

By Bruce Reichstein

What is an FHA loan? What are they used for? These are fairly basic questions, but there is a surprising amount of confusion about certain aspects of the FHA mortgage loan program. Know these facts about FHA home loans to make the decision about buying or refinancing a home loan with an FHA mortgage. FHA Single Family Home Loans Are For House Hunters FHA loans are intended for those who wish to purchase a home using a government-backed loan that requires a lower down payment than many conventional loans. These loans cannot be applied for to be used as personal loans, though FHA cash-out refinancing is an option for borrowers who have equity built up in the home over time. FHA loans are intended for owner/occupiers, and there is an | more...

October 19, 2018

Finding A Lender For An FHA Mortgage

By Joe Wallace

How do you find the right lender for your home loan needs? If you seek an FHA mortgage, the first step is to find a participating lender who is willing to write an FHA loan. After that, the process of weeding out has a lot to do with finding the services you need, the most competitive interest rate, and a lender that has the kind of loan you need. FHA Lenders: They Are Not All Alike The reason it’s important to shop around for an FHA lender includes finding one that is willing to do the kind of mortgage for the property you want to purchase. Not all participating lenders offer all FHA loan products. Depending on your housing market, certain kinds of mortgages may not be popular and may | more...

October 17, 2018

Am I Ready To Apply For An FHA Mortgage?

By Joe Wallace

Are you ready to apply for an FHA home loan? There are some steps you can take in the planning stages to make sure that when you fill out those forms, you are absolutely ready. FHA Home Loans: Is Now The Right Time To Buy A Home? There are many things that come together to make a home loan transaction successful; one of them is the timing of your loan application. Is now the right time to buy? If you have a down payment saved or budgeted for, if you have checked your credit, if you have done the math on your finances, you have a very good idea of your financial status at the moment. If there are things left undone, you can pick some of the most simple | more...

October 4, 2018

Are You Ready To Fill Out FHA Home Loan Paperwork?

By Bruce Reichstein

Are you ready to fill out FHA home loan paperwork and start the loan application process? Here are some important things you should think about before getting the forms and starting the loan. Get Ready For An FHA Mortgage Loan By Reducing Your Debt Ratios FHA home loans, like other mortgages, require the borrower to be able to realistically afford the mortgage. If you don’t know how much debt you have going out compared to how much income you have-hypothetical mortgage payments included-you aren’t ready to fill out home loan paperwork. You will need to know what the lender will see when examining your debts and income, and know how much of your income is taken up by your monthly financial obligations. Knowing Your FICO Scores Ahead Of Your FHA | more...

September 12, 2018

Five FHA Home Loan Questions To Ask Your Lender

By Bruce Reichstein

There are some important questions to ask a prospective lender when you are shopping around for a home loan. Make the most informed choice you can about selecting your lender, and remember that it pays to shop around for an FHA mortgage! #5: Will You Provide Me With An FHA Loan Estimate? The Consumer Financial Protection Bureau (CFPB.gov) advises borrowers that lenders are required to provide a loan estimate within three days of application. CFPB says the estimate should include the following: estimated interest rate monthly payment taxes and insurance total closing costs for the loan The estimate should also include how the interest rate and payments may change where applicable. Lenders should be willing to provide this estimate. #4: Are The Terms Of This FHA Loan Subject To Change? | more...

September 7, 2018

FHA Home Loans, Appraisals, And Home Inspections

By Joe Wallace

FHA home loans require an appraisal in order to insure the property meets minimum FHA requirements. The appraisal also helps the lender set the loan amount based on the adjusted value of the home. Some borrowers are tempted to skip the optional home inspection process and simply go with the FHA appraisal. This is a bad idea because doing so basically results in buying a home and making a large investment without knowing the true nature of the property’s condition. There are some questions you can ask yourself to help better understand why a home inspection is needed; learning the answers to these questions can definitely change your mind about the temptation to skip a home inspection. How Does The Buyer Know If There Is A Roof Problem? Can you | more...

August 22, 2018

Choosing The Right Options For Your FHA Mortgage

By Bruce Reichstein

Which options should you choose for your FHA mortgage? There are some things that are not required to be done in connection with your home loan which SHOULD be done, and there are choices to make that have more to do with the borrower’s financial needs and goals. Making the right choices means making informed decisions about whether to commit to things like a home inspection, financing your Up Front Mortgage Insurance Premium, or entering into a mortgage rate lock commitment with your lender. FHA Loan Options That Shouldn’t Be Considered Optional By The Borrower There are two very important aspects of home loans that are technically optional but have the power to affect your home loan experience in very crucial ways. One is the home inspection-a procedure arranged and | more...

August 3, 2018

FHA Loan Down Payment Assistance Rules

By Bruce Reichstein

FHA loan rules governing down payments and down payment assistance are found in HUD 4000.1, the FHA single-family loan handbook. FHA loan rules require both a minimum down payment and also that the down payment comes from an approved source. FHA loan rules permit borrowers to get down payment assistance from third parties, but when down payment help is offered, it must meet the same types of requirements that borrower-provided down payment funds. What are the rules for down payment assistance for FHA mortgages? FHA Home Loan Down Payments Must Be Sourced Properly FHA loan down payment money can come from a borrower’s cash reserves, cashed-in investments, checking accounts, and a variety of other sources. But it cannot come from a payday loan, cash advance, or other restricted sources. The | more...

August 1, 2018

FHA Home Loan Options You Should Know About

By Joe Wallace

Do you know all your FHA home loan options? There are important choices to make that can affect your monthly payments, the amount of down payment money you bring to the transaction, and even whether your home loan is a fixed rate mortgage or an adjustable rate loan. FHA Home Loan Options: Down Payment Assistance The FHA loan program itself does not offer down payment assistance, but permits contributions of gift funds and down payment help that meets FHA loan rules. Third parties such as government agencies or charitable organizations may be able to help with your down payment if you meet the program’s requirements. Gift funds can come from a relative or other third party but all funds for down payment must be carefully documented and verified by the | more...