Articles Tagged With: FHA ARM

April 29, 2011

FHA Loans: How Does the Bank Approve FHA Loan Applicants?

There are many types of FHA insured loans available for single-family residences. Borrowers can apply for a traditional home loan with a down payment, fixed interest rate and a 15 or 30-year mortgage. But there are plenty of other loans which can be applied for including; Section 203h Insured Mortgage for Disaster Victims Section 255 Home Equity Conversion Mortgage (HECM) Section 203k Rehabilitation Mortgage Energy-Efficient Mortgage Program (EEM) Adjustable rate mortgages Section 248 Indian Reservations and Other Restricted Lands Title I Home Improvements Regardless of what loan product is preferred, for new purchases and many FHA refinancing options, borrowers must fill out an application giving information that includes employment and residence history, detailed accounts of outstanding debts and monthly financial obligations and much more. The FHA requires this information in | more...

April 25, 2011

FHA Loans: Comparing Adjustable Rate Mortgages

By Joe Wallace

Some borrowers decide an adjustable rate mortgage is an option they’d like to look into. While there is a natural risk involved with adjustable rates–the interest rate can increase and raise the amount of monthly payments–borrowers who shop around and compare terms may be able to get into an adjustable rate mortgage that has more favorable terms. It’s a smart idea to go into an adjustable rate mortgage with the notion that you should refinance later into a fixed rate loan. The FHA streamline refinancing program has a way to do just that for those who have FHA ARM loans. Other refinancing options may be available for conventional-to-FHA loans, we’ll explore refinancing issues in another blog post. What should a borrower do to find the best adjustable rate mortgage? To | more...

February 2, 2011

FHA Loans: Using Online Calculators to Choose the Loan For You

By Bruce Reichstein

When you want to get an FHA loan--especially for that first home purchase--there are a lot of options to choose from. How does a buyer know which FHA loan product to choose? There are many ways to answer that question, but it all depends on the buyer, what his or her goals are, and how important certain kinds of savings are to the future home owner.

January 31, 2011

FHA Loans: Submitting a Written Offer to the Seller

By Joe Wallace

Buying a home with an FHA mortgage is very similar to purchasing a home with a conventional loan in many ways. Once the loan application itself has been approved and it's time to make an offer, buyer and seller interact with one another the same as with any other real estate purchase. First time home buyers with an FHA insured home loan may not know what to expect or what's expected of them at this stage in the process, but the steps are very simple. When the buyer decides that a property is the one for them, they may make an offer to the seller. As long as the offer is not submitted in writing as a binding agreement, there's plenty of room to negotiate but it's important for FHA | more...

January 27, 2011

FHA ARM Loan Options

By Joe Wallace

First time home buyers interested in FHA loans are often directed to the HUD official page where they can explore options on FHA loans. Some of the FHA's "for more information" links point to the FDIC official site, which has information on interest-only mortgage loans and option-payment adjustable rate mortgages. The FHA still insures ARM loans, which some borrowers choose because the FHA version of an ARM loan is more tightly controlled than a conventional version or a convention sub-prime loan. Those who want to purchase a home but may still wrestle with budget issues in the early years of home ownership often look to ARM loans and/or interest only mortgages as an alternative.

December 29, 2010

FHA Home Loan Down Payment Rules

By Joe Wallace

Most FHA home loan programs require the borrower to make a minimum down payment of 3.5% of either the appraised value of the property or the asking price of the home, whichever is lower. The downpayment is strictly regulated. The buyer is not only required to put down his or her 3.5%, but the FHA also requires documentation on the source of the down payment money in many cases. Documentation is required when the borrower pays more than 2% of the sale price. It's also required in any situation where the lender has certain questions about the down payment. According to FHA requirements, documentation is needed when the down payment "appears excessive based upon the borrower

December 15, 2010

What is an Illegal Referral Fee on an FHA Loan?

By Joe Wallace

The FHA requires those who do business with it to follow guidelines and regulations that protect both buyer and lender from unscrupulous practices. But FHA rules aren't all. Congress passed the Real Estate Settlement Procedures Act to prevent the practice of kickbacks and unethical referrals. According to the FHA official site, "RESPA was enacted because Congress felt that consumers needed protection from '... unnecessarily high settlement charges caused by certain abusive practices that have developed"...in some areas of the country."

December 14, 2010

FHA Closing Costs and Loan Origination Fees

By Joe Wallace

n our last blog post we discussed FHA loans and interest rates. Contrary to the impression some first-time home buyers may have, the FHA and HUD do not set or regulate interest rates on FHA mortgages. The FHA doesn't "regulate" closing costs but does have requirements which state lenders may charge what is "reasonable and customary". FHA requirements on closing costs also include the following from the FHA official site" "Aggregate closing costs charged to a borrower may not violate the FHA tiered pricing rules which prohibit a lender from charging higher prices for low balance loans than the lender charges for higher balance loans."

November 30, 2010

FHA ARM Loan Basics

By Joe Wallace

The FHA offers an adjustable rate mortgage, also known as an FHA ARM loan. These loans offer an introductory interest rate which is subject to change after the initial fixed rate period. That period varies depending on the loan--there are hybrid ARM loans available that feature different periods--but once the introductory rate period has elapsed, the adjustable rate is subject to a cap that applies either year-to-year or over the lifetime of the FHA loan. The initial interest rate is often lower than the fixed rate of conventional home loans, which is why many people consider ARM loans even in spite of the fears generated by the housing crisis of 2008.

November 30, 2010

FHA Adjustable Rate Mortgages

By Joe Wallace

There are two basic types of mortgages new house hunters should know about when shopping for FHA home loans; fixed rate FHA mortgages and Adjustable Rate Mortgages or FHA ARM loans. The FHA Adjustable Rate Mortgage is exactly what its name implies--an FHA home loan with an interest rate that can be adjusted up or down according to FHA requirements, the market and other factors. Thanks to the 2008 housing crisis, many soon-to-be homeowners are skeptical about adjustable rate mortgages whether offered by the FHA or not; FHA adjustable rate terms are definitely more predictable in some ways than their conventional loan counterparts. One of the reasons for that predictability is the ARM interest rate adjustment cap imposed on the loan. The cap protects the buyer from large swings in | more...