August 20, 2017

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Articles Tagged With: FHA Home Loan

Can my seller pay some of my closing costs?

Can My Seller Pay Some Of My Closing Costs?

Can my seller pay some of my closing costs? The basic answer is, “yes, within certain limits.” FHA loan rules permit certain expenses to be negotiated between buyer and seller, including the contribution of allowed costs. How does it work? FHA Loan Rules For Interested Party Contributions HUD 4000.1, the FHA loan handbook, defines “interested parties” as “sellers, real estate agents, builders, developers or other parties with an interest in the transaction”. HUD 4000.1 states that such interested parties are permitted to offer payments on “origination fees, other closing costs and discount points” within the bounds of FHA loan rules (more on that below), state law, and lender standards. What Payments Can An Interested Party Contribute? HUD 4000.1, page 232, states that an interested party or parties may contribute towards | more...

 
Is my credit good enough for an FHA home loan?

Is My Credit Good Enough For An FHA Home Loan?

Is my credit good enough for an FHA home loan? Borrowers need to know what FHA loan minimum credit standards are, but they will also need to find out what their participating lender’s credit requirements are above and beyond FHA loan minimums. FHA Minimum Standards For FICO Scores The FHA loan handbook, HUD 4000.1, lists the criteria the FHA requires to qualify for a home loan. For most FHA mortgage loans, borrowers who have FICO scores of 580 or higher qualify for maximum financing with the lowest down payment possible (3.5% of the adjusted value of the home or the purchase price, whichever is lower). Borrowers with FICO scores between 500 and 579 may technically qualify for an FHA mortgage, but with a minimum 10% down. Borrowers with FICO scores | more...

 
Where can I get an FHA loan?

Where Can I Get An FHA Loan?

Where can I get an FHA loan? There are plenty of options when you are ready to begin your journey to become a home owner-you can apply in person, or get pre-qualified or apply online. How does it all work? Who Offers FHA Home Loans? FHA mortgages are offered by participating lenders who have been approved by the FHA to offer FHA mortgages, refinance loans, FHA Reverse Mortgages, and rehab loans. The FHA itself does not loan the money for you to purchase your home. The FHA may require the lender, depending on circumstances, to work with the FHA to approve certain home loans, but many FHA lenders have earned the right to offer loans “unsupervised”, meaning they have met standards that permit them to make decisions on loan approval | more...

 
What Is Undisclosed Debt?

FHA Mortgage Questions: What Is Undisclosed Debt?

What is undisclosed debt and how can it affect your FHA home loan application? Undisclosed debt is basically credit information that is either not listed by the borrower on the credit application, or debt that does not show up yet on a credit report. There are several reasons why a lender would be concerned by undisclosed debt and FHA loan rules anticipate situations where such problems occur. Undisclosed Non-Mortgage Debt FHA loan rules for this type of debt which is not volunteered by the borrower on a mortgage application (or does not show up on the borrower’s credit report) are found on page 187 of the FHA loan handbook, HUD 4000.1. There we find these instructions to the lender: “When a debt or obligation (other than a Mortgage) not listed | more...

 
Why should I refinance with an FHA mortgage loan?

When Can I Refinance An FHA Loan?

When can I refinance an FHA loan? That is a common question, and one that is addressed in the FHA loan handbook, HUD 4000.1. There are rules that govern how and when you can refinance your home loan and those rules will vary depending on the type of refinance loan you seek. Most FHA home loans, including refinance loans and even reverse mortgages, require occupancy as a condition of loan approval. In the case of FHA cash-out refi loans, that occupancy is required for at least one year prior to the new loan. From HUD 4000.1: “Cash-out refinance transactions are only permitted on owner-occupied Principal Residences. The Property securing the cash-out refinance must have been owned and occupied by the Borrower as their Principal Residence for the 12 months prior | more...

 
What Is An FHA Loan Limit?

What Is An FHA Loan Limit? Part Two

What Is An FHA Loan Limit? We’ve been exploring this question-in our previous blog post we looked at the basics of FHA loan limits. According to the FHA/HUD official site, “The maximum mortgage amount that FHA will insure on a specific purchase is calculated by multiplying the appropriate LTV percentage by the Adjusted Value. In order for FHA to insure this maximum mortgage amount, the Borrower must make a Minimum Required Investment (MRI) of at least 3.5 percent of the Adjusted Value.” FHA loan limits are set by the National Housing Act and will vary depending on the housing market. Some areas are low-cost markets, some are high-cost, and others are simply “average”. But what does that mean for the typical FHA loan applicant? The FHA loan handbook, HUD 4000.1, | more...

 
Who can qualify for an FHA loan?

Who Can Qualify For An FHA Loan?

Who can qualify for an FHA loan? The answer surprises some people, thanks to some misunderstandings about who the FHA single family home loan program is for, and who can use it. FHA home loans are for any financially qualified borrower. You don’t have to earn a minimum amount of money, and there is no maximum income limit for FHA mortgages. While it’s true that FHA loans can be less expensive than their conventional mortgage counterparts (in terms of interest rates, no penalties for early payoff, etc.) these loans are not specifically targeted at people who “can’t afford conventional mortgages” or to those with an economic disadvantage. Hence, there’s no maximum income limit. There’s also no preference given by the FHA for first time home buyers, though a particular lender | more...

 
Where do you get an FHA construction loan?

Where Do You Get An FHA Construction Loan?

Where do you get an FHA construction loan? Borrowers who don’t want to purchase an existing construction property (one that has been previously owned) or a new construction home (one that is brand new and has not been owned or occupied previously) will definitely be interested in learning where to get an FHA construction loan to buy a single family home. The short answer is that an FHA construction loan is definitely possible under FHA loan program guidelines, but you will need to find a participating FHA lender willing to issue you the loan. Not all FHA lenders offer construction loans so you’ll have to shop around if your first choice in a financial institution doesn’t offer this type of FHA mortgage. There are two kinds of FHA construction loans. | more...

 
What Can I Rehab With An FHA 203(k) Mortgage?

What Am I Allowed To Rehab With An FHA 203(k) Mortgage?

In our last blog post, we discussed what is permitted under the FHA 203(k) rehab mortgage loan. Borrowers are allowed to apply for a new purchase loan or an FHA refinance loan under the 203(k) program, which the FHA loan handbook describes as being used to do the following: – rehabilitate an existing one- to four-unit Structure, which will be used primarily for residential purposes; – rehabilitate such a Structure and refinance outstanding indebtedness on the Structure and the Real Property on which the Structure is located; or – purchase and rehabilitate a Structure and purchase the Real Property on which the Structure is located. According to HUD 4000.1, “Structure” is defined as, “a building that has a roof and walls, and stands permanently in one place that contains single | more...

 
Who sets FHA loan interest rates?

What Is An FHA Loan And How Does It Work?

What is an FHA loan and how does it work? There are many differences between conventional and FHA mortgages, and those differences could mean significant savings depending on your home buying needs and goals. What An FHA Loan Is Not An FHA loan is a mortgage loan, first and foremost. It is intended to buy or refinance a property. An FHA “forward mortgage” or new home loan not intended to act as a personal loan, with cash back to the borrower at closing time. FHA loan rules don’t permit the borrower to apply for a loan greater than the adjusted value of the property plus additional costs that may be rolled into the loan. While your FHA mortgage may be greater than the total adjusted value of the property, you | more...