Articles Tagged With: FHA Loan Approval

August 11, 2020

Why Did My Home Loan Get Denied?

The question, “Why did the lender deny my home loan?” is a good one to contemplate. Thinking like a lender helps a great deal when you are planning and saving for a construction loan application, condo loan application, or when you want to buy a multi-unit home. Do you know why a lender might deny your application? There are several factors to ponder, no matter what kind of borrower you might be. Are you looking for a condo loan? Mobile home loan? Multi-unit house? Some of the reasons lenders deny home loan applications are fairly obvious, others are not. Review the following circumstances to see if any apply to you. This is not a comprehensive list, but it’s a great place to begin and some borrowers find at least one | more...

August 10, 2020

FHA One-Time Close Loan Rules: Buying Land To Build On

By Joe Wallace

You can build a home on your own lot, even as a first-time home buyer. Thanks to the FHA single-family loan program, which includes a construction loan option, you can build a home instead of buying an existing construction house AND take advantage of low FHA loan down payment requirements. FHA loan rules require only a 3.5% down payment even for construction loans, making the option to build instead of buy within reach of many who are just now exploring their options for becoming a home owner. But when considering a construction loan it’s good to remember that you don’t have to own land already–not all construction loan borrowers own their own property and need to purchase the lot as part of the loan. Building Your Home With A Construction | more...

August 6, 2020

Who Should Apply For A Construction Loan?

By Bruce Reichstein

Who should apply for a construction loan? There are two basic types of borrowers who should consider doing so–the house hunter who wants to build a house instead of buying someone else’s, and those who want to purchase fixer-upper homes and renovate them. The home loan for borrowers who would rather build their home on their own lot is called a One-Time Close (OTC) construction loan. It features a single loan application for both the construction of the house and the purchase of it once completed. Non-OTC construction loans may required two separate loans–one for the construction phase and one for the purchase of the completed house. This makes the process more complicated and having a single loan is definitely an advantage for the OTC version of these mortgages. OTC | more...

August 4, 2020

FHA Mortgage Rates Creep Lower In First Week Of August 2020

By Joe Wallace

Mortgage loan interest rates have been moving lower in 2020–so low that even seasoned market watchers are surprised by how low the rates have gone. When mortgage loan interest rates fell below the three percent zone for both conventional and government-backed mortgages like FHA loans, it was a significant moment. The 52-week average (low) for a 30-year fixed-rate jumbo loan fell as low as 3.25%, but the same 52-week average for a “normal” conventional loan (not a jumbo) was 2.86% at its lowest point in that date range. Fairly impressive, until you compare the same 52-week low to the FHA 30-year fixed-rate mortgage, with a current 52-week low of 2.30%, thanks to the numbers falling from 2.37% last week to 2.30% this week. Pretty amazing rates, and opening the month | more...

July 30, 2020

First-Time Home Buyer? FHA Loan Basics You Should Know

By Joe Wallace

2020 has brought incredible low mortgage rates, surging refinance loan applications, and sustained buying and selling homes; all this in the midst of the coronavirus pandemic. Historically low mortgage loan interest rates mean greater interest in loans and the savings current rates could provide. If you are just getting started on the road to homeownership, there are some FHA home loan basics to know as you research your mortgage options. Different Homes, Different Loans One myth of the home loan market is that there is a generic loan for any type of property you want to buy. That’s not true–there are different loans for different purposes. For example, if you want a low-down-payment loan to help you build a house on your own land, the FHA One-Time Close construction loan | more...

July 29, 2020

HUD Announces Extended COVID-19 Guidelines For Self-Employment Income Approval

By Bruce Reichstein

The FHA and HUD have announced an extension to some of its’s temporary coronavirus measures created to help participating lenders approve FHA home loans. This announcement was made in a group message containing other guidelines with changes via a “multisubject mortgagee letter” by HUD in the last week of July 2020. “COVID-19 Multisubject: Updated Temporary Guidance for Verification of Self-Employment; Rental Income; 203(k) Rehabilitation Escrow Account” is a HUD mortgagee letter with updates that affect FHA loan rules for applicants trying to qualify for an FHA mortgage with self-employment income. There are other updates for those who want to purchase a home using rental income to qualify–we’ll explore that information in a future blog post. The measures announced in the FHA mortgagee letter are not permanent; it’s part of a | more...

What Credit Score Is Needed For An FHA Mortgage?

July 28, 2020

Getting Ready For Your Home Loan

By Joe Wallace

Even during the global pandemic, people still need to buy and sell houses to live in. The real estate markets in America have not shut down, and even as you read this there are mortgages entering the closing stages. Are you looking for a new home to live in? If you are, it’s likely you’ve asked yourself whether your credit is ready for a major credit application; do you know what to do if your credit report needs correcting? One of the most common bits of advice in this area is that all borrowers should start preparing by getting very familiar with the contents of your credit report. But there is another step to take at the same time you’re doing that. Set Your Bills To Autopay When you review | more...

July 27, 2020

One Time Close Mortgage Loans: The Base Home Sales Price

By Bruce Reichstein

There are home loans for borrowers–even first-time home buyers–to allow the construction of a home from the ground up. They are called One-Time Close construction loans and are available from participating FHA, VA, and USDA lenders. One Time close loans, also known as single-close construction loans, feature one loan for both the construction of the home and the purchase of that home. When you apply for a construction loan, one area you’ll soon learn about is something called the base home sales price. This is essentially the base cost of the project using the contractor’s standard designs and features–you choose the design and features and those choices generate a base price. Choosing Features, Materials, Design How do these choices affect cost? Consider the design itself. What is the cost of | more...

July 24, 2020

FHA Mortgage Rates Lower In June 2020

By Joe Wallace

The year 2020 has brought some incredible activity on mortgage loan interest rates; at the time of this writing FHA loan interest rates remain below three percent–in the final days of July we saw mortgage rates fall to a low of (best execution) 2.38%. That rate was reported on Thursday, July 24 2020. Lower rates have prompted many to consider refinancing, but there are plenty of first-time home buyers hoping to be offered a lower rate in the current circumstances. Buying a home can be tougher during coronavirus containment measures (lockdowns, social distancing, etc.) but for those with access to the lower rates, it pays to be safe but persistent. Multiple Factors Responsible For Lower Rates Mortgage rates have dropped and stayed low due to a variety of factors including | more...

July 23, 2020

FHA Loan Limits: Where To Find Them

By Bruce Reichstein

FHA home loans, like most government-backed mortgages except for VA loans, feature loan guaranty limits which are established by county. These are annual limits and are revised (or at least considered for revision) every year. The FHA and HUD set FHA loan limits for areas that are average-cost housing markets, but also for high-cost counties and low-cost areas. FHA loan limits vary depending on a variety of factors including the nature of the cost of local housing. States have similar FHA loan limits in most counties with an outlier here or there; other housing markets (including California and New York) may have more high-cost counties than low-cost ones. East Coast real estate markets can be notorious for this, depending on location, and the FHA loan limit rules are designed to | more...