Articles Tagged With: FHA Home Loans

February 6, 2020

Buy Or Rent? The Cost Gap Gets Narrower

Do you want to own a home or rent one from someone else? According to a Realtor.com report from the fourth quarter of 2019, the cost gap between being a renter and a homeowner is lower, and it may be even more affordable to own your own home in smaller rural areas. Why? According to Realtor.com, “After years of escalating home prices making the cost to purchase a home more expensive than renting in many of the nation’s largest counties, rising rents, lower mortgage rates, and moderating home prices made purchasing a home in Q4 2019 more attractive compared to last year.” That report adds that in more than 80% of American’s largest counties it may still be more expensive to own instead of rent. Findings from the Realtor.com report | more...

January 15, 2020

FHA 203(k) Rehab Loan Standards

By Bruce Reichstein

FHA 203(k) rehab loan standards include a list of things that can be done with a 203(k) rehab loan and a list of ineligible projects. Borrowers should know ahead of time what is allowed and what is not with these FHA rehab loans. FHA Loan Rules For Renovation, Improvements, Add-Ons In general, FHA home loan programs such as the Energy Efficient Mortgage (which can be used in conjunction with an FHA 203(k) loan) and the FHA 203(k) and FHA 203(h) rehab loan feature a list of approved uses for loan proceeds. There’s a prohibition against cash back to the borrower on these transactions except where it is needed to pay for materials and labor; even then a borrower cannot “profit” from the loan. FHA loan rules require escrow accounts to | more...

How To Avoid Foreclosure During The Coronavirus

January 8, 2020

Do You Want To Buy A House This Year?

By Joe Wallace

Do you want to buy a house this year? There are things you should do to prepare for the loan, and it’s a very good idea to give yourself extra time to get it all done. It’s best to come to the application process with the following steps already accomplished. Check Your Credit Report Get a free copy of your credit reports and start reviewing your FICO scores and details to make sure there are no errors, identity theft, outdated information, etc. You are legally entitled to a free credit report. Use A Mortgage Calculator Using an online mortgage calculator will give you a much better idea of how much home loan you can afford. The online calculator will ask you for the price of the house, the interest rate, | more...

June 27, 2019

You Are Not Ready For An FHA Home Loan If…

By Joe Wallace

How do you know you are truly ready for a home loan? There are many things to consider, including your finances, credit, and employment history. But there are other factors, too. You Are Not Ready For An FHA Mortgage If You Don’t Know How Much You Can Afford To Pay Each Month Do you know how much you can afford in a monthly mortgage payment? Don’t forget that calculating your payment isn’t as simple as doing the math on the sale price of the home compared to the length of the mortgage plus interest. You will also have to figure in property taxes, any applicable homeowners or condo owners association fees, mortgage insurance premiums, and other factors. Do not overlook these expenses when doing the mortgage math! You Are Not | more...

April 22, 2019

Lower Home Prices And FHA Mortgages

By Joe Wallace

House prices in 2019 seem to be “at risk” to go lower according to some industry reports. If you are researching home prices (especially for those in housing markets on the West Coast) you may read about these issues being higher than usual for a variety of reasons. How Do Declining Home prices Affect FHA Home Loans? If the value or asking price of a neighborhood is in decline, it may affect certain options you have to negotiate with the seller. Your seller may or may not be willing to negotiate on items like the allowable six-percent-of-the-sale-price contributions toward closing costs the seller can make. Sellers may agree to pay this six percent as an incentive for the borrower to purchase the real estate. But if prices are going down | more...

April 18, 2019

Home Flipping And FHA Mortage Loans: The Rules

By Bruce Reichstein

A 2019 CoreLogic report states that home flipping, the process of purchasing, renovating, and putting a house back on the market in a short period of time and often at a substantial markup, is at it’s highest levels in about eight years. The CoreLogic report states, “…since the Great Recession, flippers have been increasingly good at acquiring properties at a discount, either because the properties were legally, financially or physically distressed”. Some borrowers may be tempted to flip homes, and others may wish to purchase a flipped home. What does the FHA home loan program’s rulebook say about this practice? HUD 4000.1 states that “eligibility of a Property for a Mortgage insured by FHA is determined by the time that has elapsed between the date the seller has acquired title | more...

March 27, 2019

FHA Home Loans For Millennials

By Joe Wallace

How young is too young to buy a home? Millennials are taking over as the largest group of home buyers in the United States, but some wonder whether they are able to qualify. What does it take to qualify for an FHA mortgage? Are There Age Restrictions On FHA Home Loans? FHA loans do require all borrowers to be of sufficient legal age to sign legally binding contracts. But aside from that, there are no real age limits for FHA mortgages with one exception. The FHA Reverse Mortgage, which lets qualified borrowers convert the equity in a home they own outright into cash, is limited to borrowers aged 62 or older. But for forward FHA mortgages to purchase a home, as long as the borrower is otherwise qualified and of | more...

HUD Releases Housing Reform Recommendations

February 13, 2019

Will Another Government Shutdown Affect First-Time Home Buyers Applying For FHA Mortgage Loans?

By Joe Wallace

While threats of another government shutdown seem to be on-again, off-again, some potential FHA borrowers are wondering if there will be a repeat of the stalemate that brought the longest government shutdown in recent memory. And will FHA home loans be available to first-time home buyers if the whole affair repeats itself again? FHA Mortgage Loans Will Still Be Available During The Government Shutdown The kind of loan you buy a home with, FHA forward mortgages, will continue to be serviced during a possible shutdown as previously reported here and elsewhere, as discussed in the HUD/FHA contingency plan released prior to the last shutdown. Reverse mortgages, on the other hand, may once again be completely unavailable during the shutdown. FHA loans that cannot be processed using automated means-those that require | more...

January 19, 2019

Are The Same FHA Home Loans Offered To A First-Time Home Buyer As Experinced Borrowers?

By Joe Wallace

There are plenty of misconceptions about the FHA home loan program and first-time home buyers may assume some of them are true. One such misconception is that the FHA home loan program is only for first-time home buyers. Another is that the FHA loan program offers perks for those who are searching for their first home or a starter home. The reality is much different. Three Things First-Time Home Buyers Should Know About FHA Loans FHA home loans are not need-based mortgages, though many who need affordable down payments and the ability to refinance later into a lower mortgage payment choose FHA mortgages for the flexible credit guidelines and other factors. Down payment assistance may be available in your local area. However, the FHA itself does not offer any such | more...

January 15, 2019

First-Time Home Buyer Advice: How To Buy Your First Home With Less Cash Up Front

By Bruce Reichstein

First-time home buyers often need to save as much cash up front on the transaction as possible. There are ways you can prepare for your FHA home loan in the planning stages that can help you buy your first home with less out-of-pocket costs. Do you know what they are? First-Time Home Buyers Should Work On Lowering Credit Card Balances Very Early Whenever Possible One very important factor in qualifying a borrower as a good credit risk when buying a first home? The amount of debt the first-time borrower carries versus the amount of monthly income. Your debt ratio is just as important as FICO scores, and the lower your debt ratio, the better off you will be when the lender goes to approve or deny the home loan application. | more...