Articles Tagged With: FHA ARM

November 1, 2018

Get Out Of An Adjustable Rate Mortgage With An FHA Refinance Loan

Are you currently paying on an Adjustable Rate Mortgage (ARM) and concerned about your next interest rate hike? It’s possible to end the uncertainty about your mortgage payments and how the next interest rate increase will affect them by refinancing into a fixed-rate FHA mortgage loan. FHA Refinance Loans Are Available As Fixed Rate Loans You can refinance an existing FHA mortgage or a non-FHA loan such as a VA mortgage, conventional loan, etc. FHA loans are designed to help borrowers get into affordable mortgages using your current income and FICO scores to qualify. If you have an FHA adjustable rate mortgage, you can refinance to an FHA fixed-rate loan using the FHA Streamline Refinance loan program. The main feature of the FHA Streamline refi is that it generally requires | more...

July 24, 2017

Where Can I Refinance An FHA Loan?

By Joe Wallace

Where can I refinance an FHA loan? Many want to know what their FHA refinance options are, but there are some misconceptions about refinancing that should be cleared up so borrowers understand all their options and not just the most obvious choices. For example, did you know you can refinance an FHA mortgage loan without an FHA-required credit check? (More information on that transaction is below.) The most basic answer to the question is that you may refinance an FHA mortgage at any participating FHA lender who offers the type of refinancing you seek, and your options may include loans that feature cash back, those which have no cash back permitted but allow a no-credit-check transaction, etc. But there’s more to this issue than just who and where you choose | more...

June 27, 2017

What Is An FHA Loan Rate? FHA ARM Loans and Fixed Rate FHA Mortgages

By Bruce Reichstein

What is an FHA loan rate? We discussed this question in our last blog post-that the FHA and HUD do not set or regulate interest rates on FHA mortgages, the ability of the borrower to buy discount points in order to lower the FHA loan rate up front, and how a borrower’s FICO scores can affect the kind of mortgage rates offered by the lender. But there is still an important issue to cover-the difference between how fixed rate FHA mortgages work and how FHA adjustable rate mortgage loans (ARM loans) work. What are the primary differences between an FHA fixed-rate loan and an FHA ARM loan? FHA Fixed Rate Mortgage Loans FHA fixed rate mortgages feature one interest rate, negotiated up front between the borrower and lender. Once the | more...

May 30, 2017

FHA Adjustable Rate Mortgages in 2017

By Joe Wallace

Are you looking for an FHA adjustable rate mortgage in 2017? FHA single family home loans come in a variety of types including fixed-rate loans and FHA adjustable rate mortgages. The rules for these loans, commonly referred to as FHA ARM loans, are spelled out in HUD 4000.1, the FHA loan handbook. FHA adjustable rate loans can be different than their conventional counterparts, starting with certain restrictions on how often the interest rate may change. Before we dive into that issue, let’s examine how HUD 4000.1 defines the FHA ARM loan: “An Adjustable Rate Mortgage (ARM) refers to a Mortgage in which the interest rate can change annually based on an index plus a margin.” Your loan officer is required to provide a disclosure form, which must be signed, that | more...

August 4, 2016

Facts About FHA Adjustable Rate Mortgages

By Joe Wallace

If you are considering your FHA loan options, at some point you’ll likely consider your choices between mortgage loan interest rate options. Qualified borrowers can choose between a fixed-rate FHA mortgage or an adjustable rate loan. Fixed rate loans seem simple and straightforward enough. The borrower applies for a home loan at an interest rate negotiated between borrower and lender. But what about adjustable rate mortgages? These loans, often called ARM or FHA ARM loans, feature an introductory rate, and a higher rate that begins at a specified point in the course of the mortgage. According to the FHA loan rulebook, HUD 4000.1, “The Mortgagee must establish the initial interest rate and the margin. The margin must be constant for the entire term of the Mortgage.” How long does your | more...

June 20, 2016

What Is An FHA Adjustable Rate Mortgage?

By Joe Wallace

The government’s consumer protection agency, The Consumer Financial Protection Bureau (CFPB), has a page on its official site explaining the differences between a fixed rate mortgage loan and an adjustable rate mortgages, sometimes known as ARM loans. According to the CFPB, “The difference between a fixed rate and an adjustable rate mortgage, is that for fixed rates the interest rate is set when you take out the loan and will not change. With an adjustable rate mortgage, the interest rate may go up or down. With a fixed rate mortgage, the interest rate is set when you take out the loan and will not change”. Does the FHA single-family home loan program offer such a loan? Can borrowers apply for an FHA ARM loan with a participating lender? Yes. Any | more...

June 8, 2016

FHA Home Loan Interest Rate Questions And Answers

By Joe Wallace

There are many questions about FHA home loans, especially where interest rates are concerned. Do you know how the FHA loan process works when it comes to negotiating rates or choosing a fixed rate or an adjustable rate mortgage loan? Here are some of the most common questions and answers in this area: How does the FHA set interest rates on FHA mortgage loans and refinance loans? In general, the FHA actually does not set or regulate interest rates on FHA home loans. For certain loan products there are restrictions on how interest rates can be changed or modified, and there are rules governing the purchase of discount points in order to lower mortgage loan interest rates. But the rates for an FHA mortgage are negotiated between the lender and | more...

March 3, 2015

Interest Rate Caps On FHA ARM Loans

By Joe Wallace

In our last blog post we began discussing FHA adjustable rate mortgages, also known as ARM loans. We talked about how an FHA ARM loan works: “An ARM has four components: (1) an index, (2) a margin, (3) an interest rate cap structure, and (4) an initial interest rate period. When the initial interest rate period has expired, the new interest rate is calculated by adding a margin to the index. Your lender will disclose the margin at time of loan application (margins may vary from lender to lender, so it’s a good idea to shop around for a low margin).” We also mentioned the adjustable nature of the interest rates on these loans. “As the index figure moves up or down, the FHA official site says a borrower’s interest rate, | more...

November 13, 2013

FHA Loans and Bankruptcy Requirements: A Reader Question

By Joe Wallace

A reader asks, “My bankruptcy was discharged December 7 2011. Prior to filing I had very good credit, but was forced to retire because of cutbacks. I currently have a Fannie Mae insured mortgage through a local bank and want to go to a small house and sell my current one. Since filing discharge my wife and I have a good credit record. When I called the bank they now tell me FHA requirement is 3 years. Previously I was told 2 years. Who is right and what can I send the bank to show them the answer.” FHA standards say different things depending on the type of bankruptcy and the circumstances surrounding it, but in any case borrowers should know that lender requirements may exceed the FHA minimums–the bank | more...

June 5, 2013

FHA Loan Answers: First Time Homebuyers

By Joe Wallace

A reader asks, “I have a Chapter 7 bankruptcy a yr ago w/a score 589 and as a veteran honorable recieving SS benefit income of $735.00/month, and together with my wife, employed 5/yrs with an income is $1,920.00 a month, with a score 580. We have been renting for 5yrs without missing or late payments with the same landlord in Fla. Can we qualify as a first time home buyer?” There are two basic issues related to this reader question. The reader asks if there’s a chance to qualify “as a first time home buyer”. The FHA does not, contrary to popular belief, require applicants to be first time home buyers in order to get an FHA home loan. By the same logic, there is no benefit or preference given | more...