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Articles Tagged With: FHA Mortgage

Buying a House

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

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...

 
FHA Home Loans

Home Buying Strategy In 2024

In the first week of March 2024, mortgage rates were hovering at near the 7% range. Some financial pundits believe this could extend into April. A housing recovery is supposed to be possible in 2024, but there has been slow progress, not overnight changes. In recent weeks (at press time) we find fixed-rate mortgages have been in the mid-to-high 6% range (30-year fixed rate conventional mortgages) and while those numbers are expected to drop “sometime” in 2024, some borrowers are unable to wait and see. What are these house hunters to do when applying for a loan with a higher mortgage loan interest rate? Buy With A Plan To Refinance Some borrowers apply for loans with an eye on a refinance loan later, and some don’t. If you apply for | more...

 
Buying A Home with an FHA Loan

FHA Home Loan Costs And How They Vary

An FHA loan has several expenses including an appraisal, home inspection, and title search expenses. These costs are not standardized and may vary depending on where you buy the home. Aside from more obvious issues like FICO scores and how the lender uses them to determine your mortgage interest rate, what are some considerations to make in this area? We examine some key factors below. Location Counts One big factor in your costs for a mortgage? Where you conduct the transaction. As mentioned earlier location may play a role in the costs. And some borrowers assume that a service will cost more in a high-profile housing market. For example, a title search in California. Is this likely to cost more than one in Idaho? In some cases, the assumption isn’t | more...

 

FHA Loan Basics In 2024

Are you new to FHA loans? Do you feel the list of requirements is a bit overwhelming? You are not alone. Many first-time home buyers experience these feelings as they get to know the home loan landscape. The good news is that your confusion will end the more you learn about how home loans work. Here is some clarity on some common FHA loan basics that some newcomers find confusing in the early days of mortgage planning. FHA Loan Approval Basics Looking at finance blogs, you will find a variety of FHA home loan requirement lists. Here is an example of one, published by NerdWallet. There are important nuances to understand about the list above. before you proceed. Let’s review each section of this list. To start, it is true | more...

 
FHA loans

Before You Close Your FHA Home Loan

Once your FHA loan application is approved by your loan officer, is your FHA loan really “bulletproof” until closing day? Some believe that it is, but this is not true, there are many things that could wind up stopping a home loan before closing day. For example, your seller may change their mind and decide not to sell. The house might appraise for a lower amount than the seller asks for, and the borrower ultimately chooses to back out of the deal. There are too many scenarios to count. A home that is damaged or destroyed before the closing day is just one variable. While that may sound extreme, that’s a problem that happens often enough to require provisions in FHA loan regulations to guide borrowers and lenders through. Don’t | more...

 
FHA Mortgage Loan

First Time Home Buyers Should Know These FHA Loan Rules

There are some FHA loan issues that are crucial to understand before you commit to a lender or a mortgage.  For example, do you know what to do if the appraisal is lower than the asking price? Or how long you will pay for mortgage insurance? These are important things to know when planning and saving for your mortgage. FHA Loan Appraisal Issues If the house is not worth as much as the price tag, your participating FHA lender cannot lend more than the actual value of the property. This rule does not prevent add-ons to the loan, but the base loan amount is for the appraised value. If you want to buy a house that appraises lower than the asking price, you can’t finance the difference. You must pay | more...

 
FHA Home Loan

FHA Loans Versus Other Government-Backed Mortgages

There are three important government-backed mortgage loan options. They are FHA loans, VA mortgages, and USDA home loans. If you are new to these mortgage programs here are some basic facts about what to know when comparing these home loans. Basic Similarities Between FHA, VA, and USDA Home Loans How do these loans stack up to one another? These loans offer the lender federal government guarantees, reducing the risk to the bank and allowing the lender to offer lower-risk mortgages to customers with lower FICO scores or with other issues making it harder to qualify for a conventional loan. These loans also feature lower down payment requirements than some conventional lenders offer consumer benefits such as restrictions on your closing costs and what fees the lender is permitted to include. | more...

 
Is your credit ready for an FHA loan?

Fees and Services For Your Home Loan

What do first-time home buyers need to remember about buying a home with an FHA mortgage?  Many home loan services you need to get to closing day are not centralized and you may have to deal with multiple service providers. It’s good to anticipate the help you’ll need on your home loan journey. We explore some of those services below. Brokers And Agents A real estate agent can help new house hunters find a suitable home. It’s a third-party service you don’t have to use, but many choose to do so to make the process easier on them. A mortgage broker provides a service to those who need a lender. A broker can match you with a participating FHA lender willing to work with you but you are not required | more...

 
FHA Mortgage

How FHA Mortgages Compare To Conventional Loans

How do FHA mortgages stack up to their conventional loan counterparts? Typical down payment issues are the most obvious comparison. The FHA has a 3.5% requirement, and conventional loan requirements vary. There are some important differences to know before you choose which mortgage loan is best for your needs. FHA Loan Best Practices FHA mortgages have two sets of rules. FHA loan program guidelines but also, lender standards like all mortgages. The FHA requires its participating lenders to keep policies that benefit the borrower. One example is the loan rule requiring ZERO penalties for early payoff of the loan. Another perk? The option to refinance later with an FHA no-credit-check streamline refinance loan option. Not all borrowers may want this option (no cash out is allowed) depending on what kind | more...

 
credit reports

What You Should Know About FHA Loans And Lender Standards

What you should know about FHA home loans and lender standards includes the basic concept that FHA loan minimums are not the only rules that affect your home loan transaction, whether it’s a one-time close construction loan, a reverse mortgage, or even a cash-out refinance. FHA loan rules are not designed to address all possible scenarios when dealing with a home loan application. FHA loan rulebooks do not include the state/municipal guidelines and requirements for every housing market. FHA mortgage loan rules in HUD 4000.1 provide some leeway and flexibility for the lender to interpret the rules in light of lender requirements, as long as those requirements are per federal law and FHA guidelines. Then there’s state law, local building code requirements, and local ordinances that must be satisfied. FHA | more...