Articles Tagged With: FHA Home Loan

July 24, 2024

Budgeting And Saving For Your First FHA Mortgage

When you decide to commit to buying a home or building one from the ground up using a one-time close construction loan, there are expenses you will need to save up for. If you haven’t started making a checklist of items you will need to pay for up front or choose to include in the loan amount, it’s a good idea to start making one as early as possible. Saving for your loan means identifying the expenses you will pay such as closing costs, appraisal fees, the home inspection fee, the FHA Up-Front Mortgage Insurance Premium, and of course the down payment. The down payment, which is a minimum of 3.5% of the adjusted value of the home, is one of the biggest expenses. That is one reason why it’s | more...

July 10, 2024

FHA Appraisals: When Are They Required?

By Joe Wallace

When is an FHA appraisal required? For any FHA purchase loan, you will be expected to pay for an FHA appraisal, even if it is an after-improvements approach for renovation refinance loans or similar options. We examine the other situations where an assessment may be needed below. FHA Streamline Refinance An FHA streamline refinance loan does not require an FHA appraisal. These refinance options are meant to provide a tangible benefit to the borrower through a lower monthly payment, a better interest rate, or switching to a fixed-rate loan from an adjustable-rate mortgage. Your participating lender may require an appraisal, which is permitted under FHA loan rules. However, no FHA requirements for appraisals exist for streamline refi loans in typical cases. FHA Reverse Mortgage Refinances FHA reverse mortgages, also known | more...

July 2, 2024

How To Qualify For An FHA Mortgage

By Joe Wallace

It’s likely the most commonly asked question about FHA loans. “How do I get approved for an FHA mortgage?” The answer starts with some numbers, but there are other important factors to remember. It’s not all about FICO scores, though they play a significant part in the lender’s decision to approve or deny a loan. FHA Loan FICO Score Requirements For Home Loan Approval If your FICO scores fall between 500 and 579, FHA loan rules say you must pay 10% down, assuming lender standards allow loan approval for those scores. Applicants with FICO scores of 580 or higher are required to make a 3.5% down payment. However, FICO scores aren’t the only factor that influences loan approval. Stable Income Rules If you are a typical college graduate, depending on | more...

July 1, 2024

Comparing Home Loan Offers

By Joe Wallace

Are you planning to buy a new home? You can find the right home loan by applying a similar process you use to find the right house. In fact, shopping around for the right mortgage loan is just as important as shopping around for the right house. If you are considering an FHA mortgage to buy, renovate, or build a home, you’ll want to make the same kind of informed decisions about the lender and the loan. Comparing lenders and loans is the way to do that. But there are some tips you can follow to make that process more streamlined. Research Multiple FHA Lenders While on paper, FHA loan terms and conditions such as FICO score requirements seem to be standardized, the FHA minimum FICO score requirements are just | 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...

May 30, 2024

Before You Reach Closing Day

By Joe Wallace

Once your home loan application is approved, is a borrower really home free on the way to closing day? Is the loan application a done deal once approved? Not quite, and that’s a factor some new borrowers should keep in mind at all times. Never assume the deal is done until the keys are in your hand. Why do we say this? There are important reasons which we explore below. Damage To The Property The house you want to buy with an FHA loan may be in great condition when you make an offer to the seller. But what happens if the house experiences a major disaster, fire, or even an accident? If your loan has not yet closed, you and the lender must determine whether the sale can happen. | more...

May 29, 2024

How To Avoid Confusion When Buying Your First Home

By Joe Wallace

Many first-time house hunters are confused by mortgage loan industry jargon, real estate acronyms, and industry terms used incorrectly. How do you separate the facts from the fiction when learning new terms along the way to closing day? There are many issues. Calling an appraisal an “inspection” is one good example (see below.) There are also industry terms that sound familiar but don’t mean what some think they mean. The whole concept of mortgage insurance is a great example (see below). We examine some of the most common of these below. Owner-Occupied Homes Are Not Investment Properties An FHA purchase or refinance loan is meant for owner-occupiers. These are the buyers who want the FHA loan to be used for the property they intend to live in. An FHA purchase | more...

May 24, 2024

Commonly Asked Questions About Applying For An FHA Home Loan

By Joe Wallace

Are you ready to stop renting and start owning your own home? The FHA home loan program was designed to help borrowers get into affordable homes with a low down payment requirement. FHA loan rules feature more forgiving FICO score standards (lender standards will also apply), and first-time home buyers should know there are down payment assistance programs in many states that can help. What sort of questions are common for FHA home loans? Read below to learn some important details every new borrower should keep in mind. How Long Does It Take To Save And Prepare For A Mortgage Application? Start planning as early as possible. It’s good to give yourself a year or more to review your credit reports, start monitoring your credit, and work on getting your | more...

May 17, 2024

Conventional Loans Versus FHA Mortgages

By Joe Wallace

What’s the major difference between FHA mortgage loans and conventional loans? Actually, there are several, but the first and most basic difference is that an FHA mortgage is guaranteed by the government. A conventional loan is not. The government’s backing of an FHA mortgage makes the loan less of a risk to the financial institution offering you a line of credit to purchase your home. And because the loan is backed by the government, FHA mortgages feature lower down payment requirements than many conventional mortgages. You may find conventional loans requiring 10 or even 20 percent down, whereas an FHA mortgage for qualified borrowers with FICO scores of 580 or above may qualify for maximum financing. That means a down payment requirement of only 3.5% of the adjusted value of | more...

May 13, 2024

FHA Appraisal Guidelines You Should Know

By Joe Wallace

The FHA and HUD have reformed parts of the FHA single-family home loan appraisal guidelines found in HUD 4000.1. These changes are meant to improve the process for reconsidering an FHA appraisal in cases where there may be defects or violations of FHA policy. Can I Get A Revised FHA Appraisal? Was your FHA appraisal is flawed? In such cases the borrower or lender may be allowed to request a Recosideration of Value (ROV). An ROV is essentially a review of the appraisal to correct report deficiencies or problems with HUD regulatory compliance. You should not expect to be allowed a second appraisal only because the value comes in lower than anticipated. What HUD Says About ROVs The HUD official site says, “A Reconsideration of Value (ROV) refers to a | more...