Articles in Category: FHA Requirements

March 8, 2023

How Do FHA Refinance Loan Requirements Work?

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...

March 6, 2023

FHA Home Loan Down Payments: Do You Need Help?

By Joe Wallace

If you want to apply for an FHA condo loan, an FHA mobile home loan, or even an FHA construction loan, you must anticipate the down payment requirements for these mortgages. At the very minimum, all FHA borrowers must put 3.5% down, with a higher down payment required for those with lower FICO scores. One of the first questions many readers will be asking at this point is likely, “What FICO scores require the higher down payment?” That question is one reason you’re reading this article right now; issues can affect your down payment requirements. It’s not safe to assume that you can simply pay what the FHA loan program rules require–lender standards, state law, and other variables can come into play. One variable is your credit score, and another | more...

February 24, 2023

What Credit Score Is Needed For An FHA Mortgage?

By Bruce Reichstein

What is the minimum credit score required to get approved for an FHA mortgage loan? Readers ask questions about this issue all the time, sending in questions asking if it is possible to still get an FHA mortgage with a low credit score. FHA loan rules establish a minimum credit score for loan eligibility but lender standards also apply so this is a harder question to answer than you might think. What is best in these situations is to know that FHA loan rules are the baseline, the minimum. The lender’s requirements are also applicable so you will need to discuss what FICO scores qualify. In general, FHA loan rules in the FHA lender’s handbook say FHA borrowers with credit scores at 580 or higher are eligible for maximum financing | more...

February 23, 2023

Rent Or Buy?

By Joe Wallace

For some, buying is better. Why? Much depends on your financial goals but you should also take into consideration aesthetics and practical concerns, too. One argument favoring buying or building (on your own lot) a home with an FHA mortgage? The ability to modify your property without having to go running to the landlord to ask permission is a big one. But some renters don’t realize that you can when you own your home, also apply for a refinance loan to repair or modify your property. That is not something you can do with a rental unit. You’re basically at the mercy of the landlord in such cases. Another argument in favor of buying a home with an FHA mortgage instead of renting? The ability to purchase a multi-unit home | more...

February 10, 2023

Credit Monitoring For First-Time Home Buyers

By Joe Wallace

Modern payment gateways, online selling and re-selling, and even digital currencies such as Bitcoin make for a more complicated relationship with credit and personal security; doing business digitally exposes consumers to more risk every day and from a variety of angles. Your account can be hacked individually, it can be compromised as part of a larger “harvest” of personal data and account numbers from a target company, etc. You may have had a credit card “skimmed” by a third-party device secretly installed in a gas pump payment swiper, or you could have been “shoulder surfed” at the ATM while entering your account information. Whatever the approach taken to this sort of crime, the threat to consumers is very real. Today’s news headlines tell us there are too many ways accounts | more...

February 6, 2023

FHA Loan Credit Score Issues

By Joe Wallace

If you do not know your credit score when you start reading this article, it’s best to plan to pull your credit reports as soon as possible after reading. If you want to get properly ready for a home loan application, you should know your credit score, the contents of your credit report, and whether you need to challenge or correct information on your credit reports. FHA Loan Credit Standards FHA loan rules for credit and FICO scores are minimum requirements. The minimums acceptable to the FHA are a baseline for the lender who may add higher credit score requirements depending on a variety of circumstances. What we’re discussing here are the FHA rules, lender requirements will vary. The FHA “Minimum Decision Credit Score” (MDCS) HUD 4000.1 is the 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...

January 29, 2023

FHA Loans: New Construction Vs. Existing Construction?

By Joe Wallace

What is the difference between new construction and existing construction? For the purpose of an FHA home loan, the distinction can be important, even if it’s just on a procedural level. The FHA loan handbook (HUD 4000.1) makes important distinctions between new construction and existing construction loans. FHA Home Loans For Existing Construction Properties The FHA defines existing construction properties in a very specific way: “Existing Construction refers to a Property that has been 100 percent complete for over one year or has been completed for less than one year and was previously occupied.” The appraisal requirements for existing construction are not quite the same (in terms of timing, paperwork and required forms) but the issue that will most affect a typical borrower is in how the appraisal is to | more...

January 17, 2023

Closing Costs Versus Down Payment

By Bruce Reichstein

Some borrowers get confused over the differences between closing costs and the required minimum down payment of 3.5% needed for FHA home loans. The confusion often comes over what is considered a down payment versus what is considered to be part of the borrower’s closing costs. The most basic thing to know is that the FHA home loan down payment is a standalone payment. It is NOT reduced by the amount of closing costs you pay such as the lender’s fee, appraisal costs, title fees, inspection fees, etc. But that isn’t all-FHA home loan rules, for example, do not permit your down payment to come from the seller. But FHA loan rules DO permit your seller to contribute a certain amount toward the closing costs of the loan. Note the | more...

December 30, 2022

Are You Ready To Buy A Home With An FHA Mortgage?

By Bruce Reichstein

Are you ready to buy a home with an FHA mortgage? There are ways to tell how close you are to being ready to start house hunting and move out of the planning stages of your new home loan. Do You Know Your FHA Loan Limit? FHA loan limits are higher in 2023, you will want to know how much higher the limit may be in your housing market compared to last year. FHA home loan limits vary depending on the housing market; some areas are more expensive than others and have a higher loan limit, while others are “average” and conform to the median FHA loan limit nationwide. Some housing markets may be less expensive than others and feature a lower FHA loan limit, but the only way to | more...