April 18, 2019

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Articles Tagged With: Amortization

Buying Versus Renting A Home

Buying Versus Renting A Home

What is the advantage of applying for an FHA mortgage to buy your home versus renting one out and declining to become a first-time home buyer? There are many differing opinions on this subject, so it seems like a good idea to simply list some facts about owning and renting a home that could help you choose which is better. Depending on your financial needs and goals, you may decide that owning is a far better option. Renting Means Accepting The Landlord’s Interior Decoration Skills Or Lack Of Them Home owners have the option to paint, wallpaper, remodel, and reconfigure their home at any time. Renters have to get permission first AND put the home back in its’s original paint scheme when the rental period is finally over. Naturally you | more...

 
Questions To Ask Your FHA Lender

Questions To Ask Your FHA Lender

There are many questions to ask your participating FHA lender when you are getting ready to purchase a first home or a replacement home. If you are looking at working with a realtor and begin your house hunting process, make sure you create a list of questions for your lender so you can go into the home loan process as informed as possible. Do FHA Home Loans Require Me To Have A Financial Need To Qualify? Your lender will explain that no, FHA home loans are not need-based. There are government-backed need based loans that feature income requirements and maximum income rules; USDA home loans are a good example. But FHA mortgages have no income limit, are not need based, and do not require the borrower to be a first-time | more...

 
Online Mortgage Calculators For First-Time Home Buyers

Online Mortgage Calculators For First-Time Home Buyers

Why should a first-time home buyer use an online mortgage calculator in the planning stages of a new home loan? There are several reasons, but one of the most important is also one of the things a new house hunter may need to learn as early as possible; the monthly mortgage payment you make as a new home owner is not just about the principal and interest payment on the loan. Three Important Things To Know About Your Monthly Mortgage Payment Buying a home with a mortgage loan-ANY mortgage loan-will include a variety of things that make up the total amount of your mortgage payment due each month. An FHA condo loan, an FHA rehabilitation loan, or even an FHA One-Time Close construction loan will have their monthly payments calculated | more...

 
How Much Home Can You Afford?

What Is A Mortgage?

What is a mortgage? To some that may sound like a totally obvious question, but for some first-time home buyers, the more information you get up front about the process of finding, buying, and owning a home the better. And that includes the most basic details of the process. FHA mortgages are an option for the serious home buyer who wants a lower down payment than many conventional mortgages and would like to enjoy the benefits of a government-backed mortgage. Why Do I Need A Mortgage? This is one of the most basic questions about the home buying process. Most people will apply for a mortgage to buy a home whether that’s an FHA new purchase mortgage, A VA home loan for qualifying military members, a USDA mortgage for those | more...

 
Should I Buy A Condo With An FHA Home Loan?

One-Time Close Mortgages: Choices To Consider

There are many options to consider when planning a One-Time Close (OTC) / Single-Close construction loan. Borrowers who want a home built for them from the ground up can choose between FHA One-Time Close, USDA One-Time Close, and VA One-Time Close construction loans.  These are also known as Single-Close loans. These three programs have some basic differences. VA OTC mortgages allow qualified borrowers to apply with no money down. USDA construction loans may also permit the borrower to apply without the expectation of a down payment, but these construction loans are only for rural areas with populations of up to 35,000 according to a 2017 USDA fact sheet about the program. One-Time Close / Single- Close Construction Loans: Occupancy Required Choices between the VA, USDA, and FHA construction loan program | more...

 
what is mortgage insurance and how does it work?

What Is Mortgage Insurance And How Does It Work?

“What is mortgage insurance?” is a common question for those new to the home loan process. Do you understand how it works? It helps to define the two things referred to by industry professionals as mortgage insurance. There is mortgage insurance which the borrower pays for as a requirement of the FHA loan, then there is the “mortgage insurance” referred to in FHA loan rules which is something else entirely. Note: What we are discussing here is not hazard insurance, which may be a requirement on some, but not all FHA loans. FHA Mortgage Insurance For The Lender The FHA single family home loan handbook, HUD 4000.1, refers to “mortgage insurance” when discussing the FHA’s role in insuring the loan to reduce the risk for the participating lender. On page | more...

 
FHA Loans And Natural Disasters: What You Should Know

FHA UFMIP Refunds: A Reader Question

Is the FHA Up Front Mortgage Insurance Premium or UFMIP refundable? A reader got in touch with us in the comments section this week to ask us a question in that area: “Is there any return of the UFMIP when refinancing out of an FHA loan to conventional? If so, what is the proration amount or percentage of fees refunded? over 6 months, 12 months, 18 months, 24 months?” This insurance premium on FHA mortgages is refundable under a specific set of refinance loan circumstances, but not for all loans. FHA loan rules in HUD 4000.1 address the issue directly; on page 156 we learn the following: “The UFMIP is not refundable, except in connection with the refinancing to a new FHA-insured Mortgage.” HUD 4000.1 states that Up Front Mortgage | more...

 
Happy Holidays 2018

Buying HUD Homes With FHA Loans

On the FHA/HUD official site, there is a section covering the purchase of HUD homes, including tips on which FHA home loan might be best for these transactions. According to the Department of Housing and Urban Development official site, “A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim”. These homes are offered for sale via HUD. Who is qualified to buy one of these properties? According to HUD.gov, “Anyone who has the required cash or can qualify for a loan (subject to certain restrictions) may buy a HUD Home. HUD Homes are initially offered to owner-occupant purchasers (people | more...

 
How much can I borrow with an FHA refinance loan?

UFMIP: FHA Loan Rules

Since we have gotten several questions lately about FHA loan rules regarding funding fees including the FHA Mortgage Insurance Premiums (MIP) and Up Front Mortgage Insurance Premiums (UFMIP), it seemed like a good idea to discuss the rules in HUD 4000.1 regarding these issues, starting with the UFMIP. For FHA single-family forward mortgages, the rules for the Up Front Mortgage Insurance Premium are found on HUD 4000.1 on page 155. It begins with the explanation of both UFMIP and MIP: “FHA collects a one-time Upfront Mortgage Insurance Premium (UFMIP) and an annual insurance premium, also referred to as the periodic or monthly MIP, which is collected in monthly installments.” Some borrowers have questions about whether or not you can finance the UFMIP and how doing so might affect the amount | more...

 

FHA UFMIP: A Reader Question

A reader asks, “I want to purchase at home for 141,000 and I am paying the 3.5 down payment which totals it 136,065. How much will I pay in Up Front mortgage and annually MIP. If I pay the UFMIP in closing will it still be added into to total amount loan?” Let’s begin with a few basics. UFMIP stands for Up Front Mortgage Insurance Premium, which is required as one of the closing costs of an FHA mortgage loan. According to HUD 4000.1, “Most FHA mortgage insurance programs require the payment of UFMIP, which may be financed into the Mortgage. The UFMIP is not considered when calculating the area-based Nationwide Mortgage Limits and LTV limits.” That last sentence means that your loan limit is unaffected by the amount of | more...