October 16, 2019

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Articles Tagged With: APR (Annual Percentage Rate)

FHA Home Loans And Interest Rates: What You Should Know About Low Rates

FHA Home Loans And Interest Rates: What You Should Know About Low Rates

At the time of this writing, what you should know about FHA Home loan interest rates includes the idea that interest rates at the moment are low for FHA mortgages, that the rates are subject to change, and that your credit report will play an important part in the rate you are offered. What do you need to know about FHA home loan interest rates in today’s housing market? FHA Loan Interest Rates Are Currently Very Low Some market watchers are quoting rates as low as 3.25%, and while that mortgage rate assumes a very well-qualified borrower, it is an indication of how low rates have gone in 2019. What’s good for the economy is often bad for mortgage loan interest rates, and the reverse can also be true. With | more...

 
Will My Home Loan Application Be Approved?

Will My Home Loan Application Be Approved?

Will my FHA home loan be approved? That is a common question for some borrowers who worry that their credit isn’t good enough for a home loan, and for borrowers who may have adverse credit information in their credit history. There is no single answer to this question since much depends on the borrower’s credit history, their patterns of credit use, debt ratios, and other factors. But in general there are some areas you can review to determine whether or not an FHA home loan is in your future. Will My Home Loan Be Approved? Occupancy Matters If you seek an FHA mortgage for a house that you (or at least one borrower obligated on the mortgage) do not intend to occupy as your primary residence, you will not be | more...

 
Preparing For An FHA Mortgage? What You Need To Know About "Contingent Liabilities"

Preparing For An FHA Mortgage? What You Need To Know About “Contingent Liabilities”

If you are preparing for a home loan and want to buy a primary residence with an FHA mortgage, you should know what the FHA loan rules are for “contingent liabilities” which involve the borrower. A contingent liability is a financial obligation that the FHA loan applicant has co-signed for in the past or is otherwise potentially responsible for should the main borrower default on the financial obligation. The FHA loan handbook defines contingent liabilities specifically as follows: “A Contingent Liability refers to a liability that may result in the obligation to repay only when a specific event occurs. For example, a contingent liability exists when an individual can be held responsible for the repayment of a debt if another legally obligated party defaults on the payment. Contingent liabilities may | more...

 
The Confusion Over Closing Costs Versus Down Payment

What You Need To Know About FHA Home Loan Interest Rates

What does a new borrower need to know about home loan interest rates? There are many home loan blogs that discuss the fluctuations of mortgage rates and talk about those moves higher and lower. Some discuss the rates as though the ones mentioned could be offered to all applicants. Why isn’t this true? The rates you see advertised on the internet are usually posted as “best execution” interest rates which means that “ideal conditions” are assumed. What are those ideal conditions? An incredibly well-qualified borrower with high FICO scores, low debt ratios, and no credit issues. That means that the actual interest rate you are offered will vary from what you see posted online, and that the rate will depend on your FICO scores and other financial qualifications. But what | more...

 
FHA Home Loans And Interest Rates: What You Should Know About Low Rates

Who Decides FHA Loan Interest Rates?

Who sets FHA loan interest rates? The answer to that question involves several factors-many potential FHA borrowers asking this question really want to know more than who the regulatory body is for FHA loan interest rates-they also want to know how rates are affected by other factors such as FICO scores and credit history. So who DOES set FHA mortgage loan interest rates? According to the FHA/HUD official site, in general interest rates are set by the Federal Reserve Board. Furthermore, “HUD does not regulate the interest rate or the discount points that may be paid by you or the seller or other third party.” The official site adds, “You should shop around to be sure you are satisfied with the loan terms offered and with the service reputation of | more...

 
What is my FHA home loan down payment?

What Is An FHA Loan Rate?

What Is An FHA Loan Rate? Simply put, the FHA loan rate is the interest rate charged on your 15 or 30-year FHA mortgage. There are some facts you should know about FHA loan rates that will make understanding them much easier. FHA Loan Rates Are Set By The Lender Technically speaking, the mortgage loan interest rate on your loan is something you negotiate with your loan officer. Your access to the most competitive FHA loan rates will be determined by your FICO scores and other financial qualifications, but beyond that you may have the option to buy down interest rates using discount points, which is something you and the lender should discuss as early as possible in the loan process. We’ll come back to discount points in a moment, | more...

 

FHA Appraisal Timing: A Reader Question

A reader asks us a question about FHA appraisal rules this week in our comments section. “Buyers want my house but dont want to process the sale until the end of April. It is now Feb. 19th 2017. I dont have a problem with that but do want some kind of guarantee that they are going to buy it.” “They are going FHA. Should I ask them to have and pay for an appraisal & inspection now as a good faith issue? If I do hold the house for 2 months I am the only one to suffer if they dont buy. Also who does the appraisal and inspection if the loan is FHA?” As for the timing of the appraisal and home inspection, that would be up to the | more...

 

FHA Loan Mortgage Insurance Premiums

Here’s a version of a common question we’ve been asked recently about FHA mortgage insurance premiums: “I closed an FHA mortgage on a house I purchased in December 2014. The following month FHA reduced the mortgage insurance premium (MIP). Can I get the lower mortgage insurance rate and a reduced monthly payment without totally refinancing my mortgage?” The FHA/HUD official site published a .pdf file that addresses this question directly. Back in 2015 the FHA lowered it’s mortgage insurance premium. The pdf states, “The reduction is effective as of January 26, 2015. Borrowers with case numbers assigned on and after January 26, 2015 will be eligible for reduced annual mortgage insurance premiums.” Note the specific date when the lower premiums become effective-borrowers who have loans prior to these dates will | more...

 
Will FHA Loans Let Me Rent Out My Home?

FHA Loan Debt To Income Ratio Rules: Student Loans

When the lender is adding up an FHA loan applicant’s income and monthly financial obligations for the purpose of calculating debt ratios, there are some debts that can be more complicated than others. Student loans, for example, can be tricky because a borrower may have student loan debt that is in “deferred” status, while others may be paying on their loans at the time of the loan application or soon thereafter. Here’s a recent reader question on the subject: “I cannot find anything that talks about NON deferred student loans. I have a client with a $63 payment on their credit report ($25,000 student loan balance). The loan is NOT in deferment, he pays $63 per month. The u/w is telling me I must use the greater of 1% of | more...

 
Mortgage Loan Rate Trends

Mortgage Rate Trends: Pushing Higher

Since our last report, mortgage loan rates have pushed forward; they moved higher on both Thursday and Friday of last week. We have several scheduled economic data releases this week and a Fed meeting that could push rates further depending on investor reaction to them. At the time of this writing, 30-year fixed rate conventional mortgages are in a best-execution range between 3.375% and 3.625% depending on the lender. 3.5% is likely more common according to our sources but your experience may vary depending on a variety of factors. FHA loan rates are still holding in the best execution 3.25% comfort zone, but if upward movement continues we may see FHA rates break out into a range with 3.25% at the bottom end initially. Best execution rates assume ideal conditions; | more...