Articles Tagged With: FHA 203k Mortgage

August 20, 2024

A Look At FHA Rehab Loans For Beginners

If you want to save money on purchasing a home, buying one that requires improvements or renovations can be a wise financial decision. FHA Rehab loans can help whether you want a fixer-upper property that’s new to you, or you want to remodel your existing home. These government-backed mortgages, or 203(k) Rehabilitation loans, combine the home purchase cost and renovation expenses into a single mortgage. This program lets you buy a house that would not otherwise pass the appraisal process. The FHA offers two primary types of Rehab loans to cater to different project scales. The Standard 203(k) option suits major rehabilitation projects typically requiring structural repairs, additions, or extensive remodeling. The minimum repair cost for this option is $5,000, and a licensed contractor must complete the work. There is | more...

June 10, 2024

When You Need To Renovate Your Home

By Joe Wallace

There is more than one way to improve your home in 2024 with an FHA loan. Do you want to cash out the equity you have built in the home and use some of the cash for repairs? In such cases, an FHA cash-out refinance is the right loan. But in other circumstances, a different FHA loan option may be better. How do you choose? FHA Rehab Loan Options The FHA 203(k) rehab loan helps those who want to buy or refinance a fixer-upper home or a house that needs improvements to bring it up to code. The FHA 203(k) rehab option is for any qualified borrower, and there is a disaster relief version known as the 203(h) for those who have homes in federal disaster areas. FHA 203(k) rehab | more...

June 4, 2024

What To Consider As You Plan Your FHA Mortgage

By Joe Wallace

Are you a new borrower with questions about how the FHA loan process works? There are important details to learn and remember to get along the way to get the most out of your FHA mortgage. Borrowing Limits For FHA Mortgages For FHA loans, HUD 4000.1 says 31% is the highest number for typical FHA mortgages without an Energy Efficient Mortgage add-on. Those loans can technically go higher. FHA loan amounts are typically guided by the appraised value of the home and the FHA loan limit for your area, among other factors. It’s possible to be approved for an FHA loan for up to 96.5% of the home’s sale price. That means your downpayment is 3.5%, which is comparatively low. But should you pay only the minimum? Borrowers interested in | more...

April 25, 2024

Need To Remodel Your Home?

By Joe Wallace

What kind of FHA loan product is right for your home repair projects? Some people want to fund a remodeling or renovation project using a credit card, but what happens when you compare interest rates on your credit card to the rates you might be charged for an FHA refinance or an FHA 203(k) Rehab loan? Some people put these repair expenses on their credit cards because they are unable to build equity in their homes for a HELOC or a cash-out refinance. But for those who can refinance to pay for the work, the savings could be a major factor in their choices. Remodeling With An FHA Cash-Out Refinance The cash-out refinance option requires sufficient equity—20% or more, depending on the lender—to be approved. But the tradeoff is that | more...

January 9, 2024

Remodeling Options With An FHA Loan in 2024

By Joe Wallace

The FHA 203(k) rehabilitation mortgage is a type of FHA loan you can use to buy and renovate a home, or refinance an existing mortgage and improve the property at the same time. Buy Or Refi? Do you want to buy a fixer-upper home with an FHA 203(k)? Do you need to refinance your existing mortgage and renovate? These are both possible. The options for 203(k) refinancing also include the ability to refinance a non-FHA mortgage into an FHA loan, and you also have the ability to finance certain closing costs. The FHA 203(k) purchase loan offers borrowers a chance to buy a house that would normally not pass an FHA appraisal. Under the FHA rehab loan program, you can hire builders to do renovations to bring the house up | more...

December 15, 2023

FHA Refinance Loans In 2024

By Bruce Reichstein

2023 was a tough year if you needed a refinance loan. Purchase loan interest rates and refinance loan rates saw the 8% range move into clear view in 2023. And that stopped some borrowers in their tracks, not wanting to refinance their home loan at a higher rate. Did it pay to hold off on a refinance in 2023? The short answer in this particular case is yes. Mortgage rates started moving lower in the final weeks of 2023, and financial pundits are hopeful that the new year will bring more recovery in mortgage rates suitable to tempt those interested in refinancing. October 2023 High Water Mark For Mortgage Rates? Rates began recovering from the October highs, recovering back down to numbers in 7% range. There are expectations of further | more...

October 31, 2023

5 Tips About Home Loans

By Joe Wallace

What do you need to know about home loans? There are certainly more than five things you’ll want to remember, but this is a great way to begin the planning stages of your new home loan. Home Loan Tip #5: One Application At A Time When you are in the planning stages of a new home loan, it might not occur to you (at first) to think of all your finances as a single entity. This is important because your lender will certainly do so, and if you have applied for any other credit in the meantime it can make it harder for your loan officer to justify approving your home loan. Plan on applying for ONE line of credit in the year you commit to the loan–your mortgage. Home | more...

FHA Home Loans And The Biggest Credit Mistake You Can Make

September 18, 2023

No Down Payment FHA Loans?

By Bruce Reichstein

Are there no down payment FHA loans? Some borrowers feel the pinch when trying to save up for closing costs, inspections, and the required minimum investment FHA loan guidelines say are mandatory for most FHA loans. They often wonder if there is a no-downpayment option when applying for an FHA mortgage. Making a down payment is an important and mandatory part of the FHA loan process, and you won’t be allowed to sidestep this requirement. That said, there is an exception for FHA 203(h) rehabilitation mortgages, but those are reserved for victims of natural disasters in federally declared disaster areas. Why do some people mistakenly believe FHA home loans are available for no money down? Partially because they are mistaking FHA loans for the VA home loan program, which offers | more...

August 14, 2023

FHA Loans For Homes Damaged In Natural Disasters

By Joe Wallace

Was your home damaged or destroyed by flooding, mudslides, or coastal erosion? Was it in the path of a wildfire? In 2023, more American homeowners have been affected by these issues, and many find themselves wondering what to do in the wake of the damage. If you have an FHA home loan and your property is damaged or destroyed by a natural disaster, you need to remember some important issues when you begin to plan to repair or replace your home. Stay In Touch With Your Lender Contact your participating FHA lender immediately. Do not delay when you need to discuss FHA options for loan forbearance, modification, or other alternatives. Don’t Rush Into An Insurance Settlement Is an agent trying to get you to hurry up and sign a settlement | more...

August 8, 2023

FHA Minimum Standards Vs. Lender Standards

By Joe Wallace

A frequently asked question about FHA home loan credit score requirements goes like this: “I recently applied for a mortgage loan, and my FICO scores are above 580, which FHA loan rules say is the score you need for the lowest down payment. But my lender wants a higher score for the lowest down payment. What’s going on? Who is right?” The most important thing to remember about the FICO score issue is that FHA minimum standards don’t always match the lender’s requirements. The lender is permitted a higher requirement as long as those requirements are deemed “reasonable and customary” for similar mortgages. FHA minimum standards are just that–minimums. A lender is free to require a higher credit score or look for better debt-to-income ratios, etc., as required by the | more...