Articles Tagged With: FHA Loan Approval

June 5, 2023

HUD Takes Action To End Appraisal Bias

The Department of Housing and Urban Development is acting against bias in the appraisal system. “Owning a home provides a path to the American dream. Yet, that dream has been deferred for Black and Brown people, as we have consistently had our homes under-valued,” according to HUD Secretary Marcia L. Fudge, quoted in the 1 June 2023 HUD press release on these appraisal reforms. Fudge adds, “Having your home undervalued is bigger than just a number on a page. It can be the difference between getting a loan and not – between having enough money for retirement or not.” According to Fudge, the PAVE Task Force is a project meant to focus on “taking bold action to address appraisal bias – and renewing our commitment to doing everything in our | more...

May 30, 2023

FHA Home Loan Down Payment Rules in 2023

By Joe Wallace

What must you know about the down payment requirement for an FHA mortgage? FHA home loans have specific rules about the amount of your down payment and where it can come from. Knowing the down payment rules before you start saving for your home loan may make the entire process more efficient, especially if you know you’re required to give the lender the sources of your down payment money and document it accordingly. FHA Loan Rules: Down Payments Are Different From Other FHA Loan Costs Some want to know if their down payment requirement can include the money they pay toward closing costs, lender fees, or earnest money. But such costs do not count as part of your down payment amount; you must provide funds for your entire down payment | more...

May 26, 2023

Is Your Credit Ready For A Mortgage?

By Joe Wallace

Do you worry about your ability to obtain or use credit because of identity theft, errors in your credit report, or coronavirus-related financial issues that still linger even after the end of the pandemic? You can protect your credit and work on your credit rating; you don’t have to sit idly by and wonder what’s happening with your FICO scores and credit report. One of the first steps for many is to use credit monitoring. This type of service offered by third parties allows you to see changes in your credit report, including activities and scores (over a period of time, not necessarily in real-time) that may affect your ability to get credit in the future. Credit monitoring is a good way to start because using such a service makes | more...

May 25, 2023

Do FHA Loan Payments Increase Over Time?

By Joe Wallace

Could the monthly amount due on an FHA mortgage increase over time? If you want a fixed-rate mortgage, that may seem like a silly question. After all, isn’t the idea behind a fixed-rate home loan to provide predictability and stability in the payments? The short answer is yes, but there are still factors that could change the total amount of mortgage-related expenses over time. Depending on circumstances, the amount you owe each month may change depending on variables such as changes in your insurance, property taxes, and homeowner’s association fees. Adjustable Rate Mortgages Your monthly mortgage payment will change if you have an Adjustable Rate Mortgage or ARM loan. An ARM loan features an introductory period with a (typically lower) “teaser” rate, but once that introductory period ends? The home | more...

May 16, 2023

FHA Home Loan Numbers You Need To Know

By Joe Wallace

What numbers do you need to know when researching your options for an FHA mortgage? The amount of your down payment, mortgage insurance, and how much your seller may contribute toward your closing costs are all important to know in your new mortgage’s planning and saving stages. FHA Loan Numbers: Down Payments FHA loan rules say if you come to the application process with FICO scores at 580 or above you can make the lowest down payment; 3.5% of the price of the home. FHA loan rules say those with FICO scores between 500 and 579 must put down 10%. As you can see, it pays to work on your credit well before your loan application. FHA Loan Numbers: Appraisal Fees There is no set national price for appraisal fees, | more...

May 15, 2023

How To Apply For An Adjustable Rate Mortgage

By Joe Wallace

Do you know how to apply for an FHA adjustable rate mortgage loan or ARM? The loan limits are the same on FHA ARMs as for fixed-rate mortgages, but your strategy for the loan should be different, as your payments are subject to change over the lifetime of the ARM loan. It’s essential to apply for an adjustable rate loan with a purpose; if you aren’t sure why a fixed rate loan is better for some than an ARM, you aren’t ready for an ARM loan application yet. The Consumer Financial Protection Bureau has sound advice for house hunters interested in an adjustable-rate mortgage, including knowing when you would want an ARM loan and when you would not want one. Have A Game Plan CFPB’s advice includes planning ahead for | more...

May 11, 2023

How Escrow Works

By Joe Wallace

When you buy a home with an FHA loan your lender may require you to use an escrow account. This is especially relevant for those who seek One-Time Close construction mortgages, FHA 203(k) Rehabilitation loans, and any other home loan that may require an account to pay for contractors, materials, etc. FHA Reverse Mortgages also require escrow for the payment of property taxes–all Reverse Mortgage borrowers are required to stay current on property taxes as a condition of loan approval. But what is escrow and how does it work? An escrow account is basically a bank account used to hold the money you need to make a good faith deposit, property tax money, etc. The cash is deposited and held on account until the time comes to make the payments. | more...

Build on your own lot. Construction loan basics

May 3, 2023

Build A House On Your Own Land With An FHA Mortgage

By Bruce Reichstein

Some house hunters decide to stop looking at existing construction homes and start thinking about building a house for themselves from the ground up. Other people know from the start of their homeownership journey that they want to build and not buy an existing home. FHA home loan rules in HUD 4000.1 include guidelines for lenders who want to help these borrowers. The section of the rulebook titled “Building on Own Land” tells lenders how to proceed with a construction loan including maximum loan amounts, who can act as the general contractor on the project, and more. Are you interested in having a house built for you on your own lot? Not interested in having to choose from existing construction housing? Building on your own land may be the right | more...

May 2, 2023

Do You Qualify For An FHA Mortgage As A First-Time Home Buyer?

By Joe Wallace

Do you qualify for an FHA home loan as a first-time home buyer? You can check several things to see whether your credit and employment situations will allow a lender to justify approving your mortgage loan application. Buying real estate means making a significant investment; potential borrowers who are not financially ready for this investment should take their time, prepare for it, and commit when they are fully prepared. What does it take to get an FHA home loan approved? Stable Employment If you are considering applying for an FHA home loan without at least two years of work history, it may be a wise idea to delay your application until you have at least 24 months of work on your record. There may be some exceptions to the 24-month | more...

April 28, 2023

How Much Is Your FHA Mortgage Payment?

By Joe Wallace

Are you new to house hunting? If you have never applied for a home loan before it’s understandable that you might view a mortgage payment as a simple calculation involving the principal and interest multiplied by the number of mortgage payments you have to make. But principal and interest are only two factors that influence how large your monthly mortgage obligation is. FHA Mortgage Insurance Premiums and UpFront Mortgage Insurance Premiums Your FHA mortgage insurance premiums can change how much you pay each month for the home loan. Did you choose to finance the FHA Up-Front Mortgage Insurance Premium or UFMIP? If so, expect an increase in your monthly mortgage costs. Property Taxes Property taxes are part of owning a home, and once you get used to paying them it | more...