April 1, 2020

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Articles Tagged With: Down Payment

Planning Your Home Loan

Planning Your Home Loan

The planning stage of your home loan is extremely important. This is where you will determine what kind of home you might want, the price range you can afford, and how much down payment you need to save up to make. One big choice you face in the planning process? Decisions about issues related to long-term occupancy of the home, whether you plan to sell within a short or long amount of time and how you should arrange your financing to accommodate those needs. What kind of arrangements? Some borrowers don’t apply for a fixed-rate mortgage. They know they are not keeping the home for the long-term and choose to take advantage of lower interest rates offered in the introductory period of an FHA Adjustable Rate Mortgage (ARM) instead of | more...

 
Repair Your Credit Before Your Home Loan

Repair Your Credit Before Your Home Loan

Interested in applying for an FHA mortgage or a refinance loan? It’s not as easy as finding a lender and applying; you will need plenty of time to save for the expenses of the loan including the down payment and closing costs. But you also need more time in another way; taking a preliminary step as early as possible in your loan process can make the difference between loan approval and rejection. What is that preliminary step? Reviewing your credit report for errors and identity theft evidence. It’s also about working on raising your FICO scores based on the results of your credit report review. All Americans are entitled to a free copy of their credit report once per year, so there is no cost to obtain one. You can | more...

 
Buying a home is a major investment. And unless you are applying for a need-based loan such as a USDA mortgage, or if you are a qualifying veteran or military member applying for a VA mortgage, you will need to come up with a down payment.

For Borrowers Who Need Down Payment Help

Buying a home is a major investment. And unless you are applying for a need-based loan such as a USDA mortgage, or if you are a qualifying veteran or military member applying for a VA mortgage, you will need to come up with a down payment. Borrowers who use conventional loans typically make larger down payments than those who use government-backed mortgage loans like FHA loans. Why? Because government-backed mortgages carry an advantage for the lender; they are guaranteed against loan default and foreclosure. Should the worst happen after the loan has closed, the government pays the lender a portion of the mortgage. It’s called a claim when this happens, and such claims are a risk of doing business in the mortgage market. Reduced risk for the lender is a | more...

 
Do You Need Down Payment Help?

Do You Need Down Payment Help?

Saving for your down payment early is a great idea, and doing so can be easier when you have a clear goal in mind. But how much IS that down payment and when should I start doing the math? Some people are intimidated by the idea of saving up for and making the down payment. Even those who are disciplined and used to cutting corners for a bigger goal can need some outside help to find the down payment money down needed to buy a home. FHA Loans = Lower Money Down FHA mortgages have lower down payment requirements than conventional loans, especially if you want to avoid Private Mortgage Insurance on a conventional mortgage (20% is usually required in such cases). State agencies and other entities operating at the | more...

 
Don't Make These Mistakes With Your One-Time Close Construction Loan

Don’t Make These Mistakes With Your One-Time Close Construction Loan

The FHA One-Time Close construction loan is meant for borrowers (first-time home buyers or otherwise) who would rather build a house on their own lot instead of buying an existing property. The beauty of the FHA One-Time Close loan is that you can be a first-time home buyer and make the same low down payment of 3.5% as any other FHA borrower. But there are some pitfalls to avoid with FHA One-Time Close mortgages; these are the same mistakes that are made with other home loan transactions, but with a construction loan you may find that more attention is paid to these issues due to the more complex nature of the loan. Avoid Changes In Your Credit Changes to your financial status before loan closing means things like adding more | more...

 
FHA Home Loan Limits: Facts You Should Know In 2020

FHA Loan Down Payment Rules

Do you know what the rules are for down payments according to the FHA Lender’s Handbook? HUD 4000.1 states that the minimum required down payment allowed for FHA mortgages is 3.5% of the adjusted value of the home. The borrower must pay this independently of any other closing costs associated with the loan. The seller, lender, or any other party with a stake in the outcome of the transaction cannot provide down payment funds to the borrower. Sellers are permitted to contribute toward closing costs, but not the down payment. The down payment is part of the borrower’s cash requirement to close the loan. The lender is required to verify the sourcing of all down payment funds (including gift funds from other people) to insure the money does not come | more...

 
Do You Need Down Payment Help?

FHA Loan Down Payment Help For Borrowers

Even with the FHA loan program’s low 3.5% down payment requirement, some borrowers struggle to come up with the minimum required investment for the purchase of an existing home or construction of a new home. Fortunately, there is home loan down payment assistance available for borrowers from local agencies (the FHA itself does not provide down payment funds) and there are resources you can search to find the down payment help you need in your local area. But there are rules for down payment grants, home buyer grants, and other forms of down payment help. FHA loan rules say any down payment help must meet FHA requirements and must not be used in ways that are against the rules. For example, some well-intentioned groups may offer down payment funds to | more...

 
HUD Releases Housing Reform Recommendations

HUD Announces Housing Reform Recommendations

The Department of Housing and Urban Development has issued recommendations to the President for housing reform, including attention on down payment assistance programs and cash-out refinancing. According to a press release issued on the HUD official site, this is NOT the same housing finance reform plan, which was developed by the U.S. Treasury Department. There are major differences between the two in some respects including the HUD language discussing the need to focus on “the core mission” of the FHA where home loans are concerned. It’s the view of the Treasury Department (as stated in the plan) that any changes to the core of what has traditionally been considered an FHA loan program could be detrimental. The Treasury Department plan states, “…any proposal to fundamentally change the housing finance system | more...

 
Does The Fed Interest Rate Cut Also Cut Mortgage Loan Rates?

The Confusion Over Closing Costs Versus Down Payment

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...

 
FHA Refinance Loans: Are You Ready?

FHA Loan Down Payment Rules: When More Is Required

FHA home loan down payment rules allow for a low 3.5% down for borrowers who qualify with FICO scores in the 580-or-above category. FHA loan minimums do not address lender standards, which may be higher, but that is one reason why it’s important to shop around for the right FHA lender. The low FHA loan down payment is one reason why FHA mortgages can be so attractive, especially for first-time home buyers. But when will a borrower be required to put a higher amount down on the mortgage? There are several instances to be mindful of. FHA Loan Transactions That Require 15% Down: Identity Of Interest The FHA Single Family Loan Handbook, HUD 4000.1, says there are circumstances where 15% down is required; often when there is an identity of | more...