Articles Tagged With: FHA Lenders

March 12, 2024

Home Loan Rules New Buyers Should Know

Your participating lender will provide you with loan guidelines, including certain restrictions on the source of your down payment funds. Did you know that FHA loan rules forbid the seller of the home from contributing toward the borrower’s down payment? That is a very important rule a first-time homebuyer should know when thinking about applying for home loans. Seller Assistance With Closing Costs Your seller IS permitted to offer assistance with closing costs, and those funds will be applied to approved expenses related to your home loan. The seller is allowed to contribute up to six percent of the sale price of the home (this amount may be less for some mortgages, like VA loans) toward your closing costs. Incentives To Purchase? But the seller CANNOT provide money above and | more...

March 6, 2024

Low Down Payment Home Loans

By Joe Wallace

Many potential homeowners are intimidated by saving up for a down payment. But resources are available that make getting your down payment money together easier, including down payment grants and low down payment mortgages like the FHA home loan program. What do you need to know about low down payment loans? FHA Home Loan Down Payment Rules FHA loans only require a 3.5% down payment for borrowers who qualify with FICO scores of 580 or better (FHA standards; lender standards will also apply). Where Does Your Down Payment Money Come From? FHA loans allow you to pay your own down payment or receive help with a down payment grant or gift funds. FHA loan rules require the source of your down payment funds, including gift funds, to have proper sourcing, | more...

February 15, 2024

Home Loans: When To Get Pre-Approved

By Joe Wallace

When should a house hunter choose to get pre-approved for a home loan? It’s a common question many borrowers ask. But this question can be confusing because some use the term “prequalify” interchangeably with “pre-approval”. But these two terms actually mean different things. Getting prequalified for a home loan is something you do early in the house-hunting stages. You are not ready to make any offers, but you want to let sellers know you are not window shopping. Prequalification means the borrower has filled out some basic paperwork with a lender while in house-hunting. It is not loan approval, and borrowers still, at this stage, have a ways to go before loan approval happens, including filling out basic loan application paperwork (not pre-qualification paperwork). Do You Always Need To Pre-Qualify? | more...

June 2, 2023

FHA Home Loan Pre-Approval And Mortgage Loan Approval

By Bruce Reichstein

If you are considering an FHA home loan it is a smart idea to get pre-approved for a home loan before you start house hunting. If you are new to the home loan process, you might not be sure what the difference is between FHA loan approval and getting pre-approved for an FHA mortgage. What is that difference? Getting through the initial pre-approval application does not mean you’ve been fully approved for the mortgage. But it IS an important tool for soon-to-be homeowners. Home loan pre-approval is a tool for both borrower and lender to determine if you’re ready to buy based on your income, debt to income ratio levels, the amount of down payment you have saved, etc. Think of pre-approval as the start of the loan process, but | more...

Construction Loan Advice For New Borrowers

March 27, 2023

Are You Ready For A Construction Loan in 2023?

By Bruce Reichstein

You can use a One-Time Close construction loan to build a new home on your own land or land you buy in conjunction with the loan. This is a good option to think about if you want a house with designs you’ve approved instead of buying someone else’s house. Getting Your Loan Started Finding a participating FHA or VA lender, depending on the loan you choose is an integral part of the construction loan process. You should also know that construction loan mortgages require higher FICO scores and more time before move-in than a typical home purchase loan. But the end results are worth it. But just as important? Finding the right builder. One-Time Close loans don’t allow the borrower, builder, relatives of the buyer, etc . to act as | more...

February 15, 2023

FHA Fixed-Rate Mortgages Versus Adjustable Rate Mortgages

By Joe Wallace

What’s the difference between a fixed-rate mortgage and an adjustable-rate home loan? In 2023, you may find advantages in both types thanks to inflation and a recovering housing market. FHA single-family home loans come in a variety of types; both fixed-rate loans and those with adjustable rates. The rules for these loans, commonly referred to as FHA ARM loans, are spelled out in HUD 4000.1, the FHA Lender’s Handbook. Fixed rate home loans backed by the FHA are essentially what their name implies; a mortgage with a rate negotiated between the borrower and lender that does not change for the entire loan term. Borrowers who later want to apply for a lower rate can apply for FHA refinancing, including options such as the FHA Streamline Refinance loan program for FHA-to-FHA | more...

Home Loans For Building On Your Own Land

February 12, 2023

One-Time Close Construction Hints

By Joe Wallace

One-Time Close (OTC) loans allow borrowers to build a house on their own lot instead of having to choose from existing properties. You can be a first-time home buyer and still be approved for a One-Time Close construction loan, also known as Single-Close loans or Single-Close construction mortgages. If you have never examined your options on the real estate market, it’s easy to assume you aren’t financially qualified for a construction loan. After all, that sounds like a very big undertaking, doesn’t it? Having a house built for you? That may sound like something that other people might qualify for, but the fact is that FHA and VA OTC loans have the same requirements as any other FHA or VA mortgage. These loans are designed to be more affordable, and that | more...

January 30, 2023

Before You Start House Hunting: Housing Counseling

By Joe Wallace

Saving money is usually done to prepare for a home loan, but did you know there is a simple trick to saving money on mortgage expenses? It basically involves being a more informed borrower so you don’t mistakenly choose options that cost you more unnecessarily. Getting the right home loan for your needs can help you maximize your real estate dollar, but you’d be surprised at how many people don’t know the options they have where home loans are concerned. A Freddie Mac report indicates that housing counseling and/or good financial education is a key benefit when you start the journey toward buying real estate. Knowing which loans are best for your needs and which ones to avoid is key. A Freddie Mac “Generation Z Study”, concluded, “The dream of | more...

If Your Home Was Damaged In A Federally Declared Disaster Area

January 23, 2023

FHA Refinance Loans For Your First Home

By Bruce Reichstein

Why should first-time home buyers start thinking about their FHA refinance loan options sooner instead of later? It’s not because you are actively planning to refinance, but there are circumstances which may make you reconsider your refi loan options. As a millennial home buyer, first-time homeowner, or any other type of borrower, unforeseen events or situations may have you re-thinking your long-term financial plans. There are FHA refinance loan options for first-time home buyers and new homeowners, but some are more appropriate for certain needs than others. FHA Refinance Loans For Upgrades, Repairs, And Home Improvements If your home is damaged in a storm, you experience a fire or flood, or need to repair your roof, an FHA 203(k) rehabilitation loan is the refinance you should ask a participating FHA | more...

December 17, 2022

FHA One-Time Close Construction Loans: Five Facts You Should Know

By Bruce Reichstein

You don’t have to purchase someone else’s house–you can use an FHA construction loan to build your dream home to your specifications using plans you approve. The FHA One-Time Close construction loan makes it easier by eliminating the two-loan process, consolidating the construction loan into a single application, a single approval process, and a single closing date. Construction Loan Fact One: Multiple Options FHA One-Time Close mortgages are not the only option; there are several different types of One-Time Close loans, also known as single-close construction loans. There’s the FHA version, but also a USDA construction loan for those who demonstrate financial need, and a VA construction loan version for those with qualifying military service. And these construction loans are available for any financially qualified borrower who meets program standards. | more...