Articles Tagged With: FHA Loan Approval

March 26, 2024

FHA And HUD Offer Foreclosure Avoidance Option

In late February 2024, the FHA announced a new home retention option for borrowers with FHA single-family home loans who may experience financial trouble along the way. The FHA Payment Supplement Program Is An Important Option The FHA Payment Supplement allows participating FHA lenders to temporarily alter the terms of the FHA loan to lower monthly payments without changing the home loan interest rate. This adjustment is not permanent but is designed to help borrowers avoid foreclosure during financial difficulties. FHA lenders working with borrowers in financial trouble now can lower the FHA mortgage payment by as much as 25%. That is meant as a temporary reduction designed to help those who can’t keep up with payments and have an FHA loan with an interest rate lower than current rates. | more...

March 25, 2024

Housing Market Recovery Predictions

By Joe Wallace

Q1, also known as the first quarter of the year, is ending, and market watchers are reassessing some of their earlier housing market recovery predictions. As Q1 2024 ends, some at Fannie Mae are saying yes, the rates are recovering, but they are moving more slowly than some would like. At the time of this writing home loans with 30-year fixed rates are at approximately 6.87%. That feels closer to the 7% range than some would like, but the rates do seem to be moving lower. Multiple factors contribute to the slower-than-hoped-for rate recovery, but none of them indicate that we will experience a shock return of much higher rates. Fannie Mae has gone on the record with a. revised mortgage rate outlook for 2024. The agency now says rates | more...

March 20, 2024

What To Know About FHA Loans And Escrow

By Joe Wallace

FHA loans typically involve some form of escrow. Some FHA loans have different escrow requirements than others and you should know what your specific loan type will require before you commit. What Is Escrow? Finance blogs often describe escrow as an arrangement where a third-party account retains money to facilitate a home loan. It’s done on behalf of the borrower and lender and money comes out of the account based on specific conditions or instructions. You can expect to use escrow to pay for property taxes, paying contractors for labor or materials, and even earnest money if you and the lender agree. Escrow provides a layer of protection for both borrower and lender and it pays to know as much as you can about how it works before you commit | more...

March 14, 2024

Is It Time To Buy A Home With An FHA Mortgage?

By Bruce Reichstein

Some borrowers are not sure if they are truly ready to buy a house with an FHA mortgage. Not in the financial sense. For this article, we do not mean “ready” in the sense that a borrower has saved a down payment, worked hard on credit, and has a budget plan that includes the new mortgage payment. In this article, being “ready” means deciding to stop renting and start owning a home. Running The Numbers Before You Shop Get a calculator ready if you need to answer the rent-versus-own question. Compare the current rental options with the cost of owning. Ask yourself, how much is your rent? What about renter’s insurance, monthly utility expenses, and other costs like parking and trash removal? How does that amount compare to the costs | more...

March 13, 2024

Home Loan Mortgage Insurance Requirements

By Joe Wallace

When it is time to buy a new home, borrowers have important decisions to make about mortgage insurance. Do you know who is required to pay for mortgage insurance and why? There are home loan programs that offer the option of paying 20% down and sidestepping the lender’s mortgage insurance requirements. Other mortgage loans may require borrowers to come up with a larger down payment to take advantage of the option to stop paying mortgage insurance after 11 years. Some mortgages have no insurance guidelines in this area at all. We examine these programs below. What To Know About Conventional Loan Mortgage Insurance There is no national standard for conventional loan mortgage insurance in terms of lender requirements. Borrowers can expect to pay 20% down on a conventional loan to avoid | more...

March 12, 2024

Home Loan Rules New Buyers Should Know

By Joe Wallace

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 11, 2024

FHA Loan Down Payment Advice

By Bruce Reichstein

Are you looking for a home loan with a lower downpayment requirement? In 2024, FHA home loans are a smart option to consider in such cases as the housing market slowly tries to recover. These down payments are often lower than their conventional mortgage equivalents, and borrowers who struggle to come up with the 20% down needed to avoid conventional private mortgage insurance, which is required on a conventional mortgage, may find a better option in the FHA loan program. According to the Consumer Financial Protection Bureau, those who don’t pay 20% down on a conventional loan may encounter down payment requirements of up to 15%. “Most lenders offer conventional loans with PMI for down payments ranging from 5 percent to 15 percent.” The Bureau adds that “some lenders may | more...

March 7, 2024

Changes To FHA Manufactured Housing Loans

By Joe Wallace

Did you know that some 20 million Americans live in manufactured housing? Most government-backed mortgage programs offer loans to these borrowers. That includes FHA home loans for manufactured housing, modular houses, and mobile homes. There’s a separate FHA loan for these homes like there are separate FHA condo loans and construction mortgages. The FHA and HUD are working to expand manufactured housing options through the FHA Single-Family Home Loan Program and are offering new options to organizations responsible for multi-family housing. HUD To Increase Availability Of Affordable Manufactured Homes WhiteHouse.gov issued a press release on the federal government’s efforts in 2024, noting, “Manufactured housing is a critical source of affordable housing, especially for low-income, rural, and Native American households and offers a potentially lower-cost pathway to homeownership.” Manufactured housing, also | more...

February 29, 2024

FHA Mortgage Loan Rates And Cash To Close

By Joe Wallace

If you want to buy a home using an FHA mortgage, the required minimum cash to close is one of the things you must plan and save for in the beginning stages of the loan. Some view the rates and costs as being separate…at first. Some borrowers quickly learn that FHA loan closing costs and the interest rate your lender offers may be more related than they realize. Much depends on which options the borrower decides to pursue. FHA Home Loan Closing Costs Your FHA loan cash-to-close requirements include the lender’s fee, your down payment, and other expenses such as the upfront mortgage insurance premium. Some costs you can finance. One is the FHA upfront mortgage insurance premium. Other expenses cannot be added to the loan amount. That said, a | more...

February 22, 2024

Before You Apply For An Adjustable-Rate Mortgage

By Joe Wallace

Are you worried about FHA loan interest rates? If you have decided to explore your home loan options with an FHA adjustable rate mortgage, here are some important details to know while still planning and saving up for the loan. FHA ARM Loans Differ From Conventional ARM Loans An FHAS adjustable-rate mortgage isn’t necessarily the same as a conventional equivalent. Your conventional lender’s occupancy guidelines will vary. Does yours have a requirement that the property securing the ARM loan serves as your home address? FHA ARM loans definitely require this as a condition of loan approval. Occupancy is key in that at least one borrower obligated on the FHA loan must live in the home being refinanced or purchased with an ARM. FHA loan rules on occupancy extend to nearly | more...