Articles in Category: FHA Requirements

February 29, 2024

FHA Mortgage Loan Rates And Cash To Close

If you want to buy a home using an FHA mortgage, the required minimum cash to close is one of the things you must plan and save for in the beginning stages of the loan. Some view the rates and costs as being separate…at first. Some borrowers quickly learn that FHA loan closing costs and the interest rate your lender offers may be more related than they realize. Much depends on which options the borrower decides to pursue. FHA Home Loan Closing Costs Your FHA loan cash-to-close requirements include the lender’s fee, your down payment, and other expenses such as the upfront mortgage insurance premium. Some costs you can finance. One is the FHA upfront mortgage insurance premium. Other expenses cannot be added to the loan amount. That said, a | more...

February 28, 2024

FHA Home Loan Costs And How They Vary

By Joe Wallace

An FHA loan has several expenses including an appraisal, home inspection, and title search expenses. These costs are not standardized and may vary depending on where you buy the home. Aside from more obvious issues like FICO scores and how the lender uses them to determine your mortgage interest rate, what are some considerations to make in this area? We examine some key factors below. Location Counts One big factor in your costs for a mortgage? Where you conduct the transaction. As mentioned earlier location may play a role in the costs. And some borrowers assume that a service will cost more in a high-profile housing market. For example, a title search in California. Is this likely to cost more than one in Idaho? In some cases, the assumption isn’t | more...

February 21, 2024

Who Needs Homeowner Insurance?

By Joe Wallace

FHA loans, VA mortgages, and similar government-backed home loans don’t force the borrower to select specific types of homeowner insurance to protect your investment but that does not mean it’s not necessary. Mortgage insurance protects the lender. If the borrower defaults on the FHA home loan, mortgage insurance minimizes the loss for the bank. Home insurance, on the other hand, is a tool for the borrower. It protects your investment by insuring your home and its contents depending on the wording of your specific policy. First And Foremost Paying for both insurance types may make you feel there is protection for all circumstances. But not all types of damage are covered by your insurer. Did you know that flood insurance is completely separate from insurance for water damage? Some borrowers | more...

February 14, 2024

First Time Home Buyers Should Know These FHA Loan Rules

By Joe Wallace

There are some FHA loan issues that are crucial to understand before you commit to a lender or a mortgage. For example, do you know what to do if the appraisal is lower than the asking price? Or how long you will pay for mortgage insurance? These are important things to know when planning and saving for your mortgage. FHA Loan Appraisal Issues If the house is not worth as much as the price tag, your participating FHA lender cannot lend more than the actual value of the property. This rule does not prevent add-ons to the loan, but the base loan amount is for the appraised value. If you want to buy a house that appraises lower than the asking price, you can’t finance the difference. You must pay | more...

February 13, 2024

FHA Loans Versus Other Government-Backed Mortgages

By Joe Wallace

There are three important government-backed mortgage loan options. They are FHA loans, VA mortgages, and USDA home loans. If you are new to these mortgage programs here are some basic facts about what to know when comparing these home loans. Basic Similarities Between FHA, VA, and USDA Home Loans How do these loans stack up to one another? These loans offer the lender federal government guarantees, reducing the risk to the bank and allowing the lender to offer lower-risk mortgages to customers with lower FICO scores or with other issues making it harder to qualify for a conventional loan. These loans also feature lower down payment requirements than some conventional lenders offer consumer benefits such as restrictions on your closing costs and what fees the lender is permitted to include. | more...

February 6, 2024

Fees and Services For Your Home Loan

By Bruce Reichstein

What do first-time home buyers need to remember about buying a home with an FHA mortgage? Many home loan services you need to get to closing day are not centralized and you may have to deal with multiple service providers. It’s good to anticipate the help you’ll need on your home loan journey. We explore some of those services below. Brokers And Agents A real estate agent can help new house hunters find a suitable home. It’s a third-party service you don’t have to use, but many choose to do so to make the process easier on them. A mortgage broker provides a service to those who need a lender. A broker can match you with a participating FHA lender willing to work with you but you are not required | more...

January 30, 2024

Five Reasons To Buy Your First Real Estate With An FHA Home Loan

By Bruce Reichstein

FHA home loans are a great way to make your first real estate purchase. Are you looking at homes for sale and trying to decide the best mortgage loan for you? If you are a first-time home buyer and feel confused by what your real estate agent finds in MLS listing data while searching for “houses near me”, remember that the FHA mortgage loan option is available to anyone who financially qualifies. If you are talking to a real estate agent, do not forget that FHA loans are not restricted to first-time homebuyers or those who have never owned property. You can own other property and still buy a home as your primary residence using an FHA loan whether you’ve purchased another property or not. #5: FHA Loans Are Guaranteed | more...

January 24, 2024

Home Loan Applications Rising In Early 2024

By Joe Wallace

Are you considering buying a new home with an FHA loan? Current market trends point to growing interest in existing construction purchases. And that is in spite of a bit of mortgage loan interest rate changes pushing rates higher (in the short term.) That move higher has not discouraged many from their overall impression of a housing market in recovery, however slow the progress may be. Business Insider reports that, at press time, “30-year mortgage rates have averaged around 6.32%,” according to Zillow. The report also notes that the rates are “a bit below” the December interest rate averages, “and more than a full percentage point down from when they peaked in October 2023.” As housing market and home loan interest rate conditions improve, demand for existing construction homes may | more...

January 23, 2024

Planning & Saving For Your FHA Loan

By Joe Wallace

House hunters need to save cash when planning to buy a house in the new year. Some things have always been on the list but have, in more recent times, become more important to consider while in planning mode. FHA Home Loan Down Payment Issues To Know The down payment issue is non-negotiable for typical FHA loans, money down is required. However, you might be surprised by your options when saving for it. You’ll need to save a MINIMUM 3.5% down payment, but in 2024, you may want to consider making a bigger down payment. It can help you save on interest rates over the loan term. There are variables, including whether or not you choose to finance closing costs, and those are factors to consider and ask the lender | more...

January 19, 2024

Who Qualifies For FHA Loans?

By Joe Wallace

Whether you’re interested in building a house from the ground up on your own lot or need a mobile home or condo unit, there is an FHA home loan for you. Who qualifies for these mortgages and why? FHA Loans For First-Time Home Buyers FHA mortgages are open to first-time homebuyers without perfect credit. You can apply for an FHA home loan even with past credit mistakes. The best thing to do is review your past credit and ensure your home loan application is turned in once you have a full year of on-time payments on your credit record. First-time borrowers should know an FHA mortgage, even an FHA One-Time Close construction loan is within their reach thanks to low 3.5% down payment requirements and the ability to get down | more...