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Articles Tagged With: First-time Home Buyer

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...

 
Do You Need Down Payment Help?

FHA Mortgage Loan Rates And Cash To Close

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...

 
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

Who Needs Homeowner Insurance?

FHA loans, VA mortgages, and similar government-backed home loans don’t force the borrower to select specific types of homeowner insurance to protect your investment but that does not mean it’s not necessary. Mortgage insurance protects the lender. If the borrower defaults on the FHA home loan, mortgage insurance minimizes the loss for the bank. Home insurance, on the other hand, is a tool for the borrower. It protects your investment by insuring your home and its contents depending on the wording of your specific policy.  First And Foremost Paying for both insurance types may make you feel there is protection for all circumstances. But not all types of damage are covered by your insurer. Did you know that flood insurance is completely separate from insurance for water damage? Some borrowers | more...

 
FHA loans

Home Loans: When To Get Pre-Approved

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...

 
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...

 
FHA Home Loan

FHA Loan Terms: Which To Choose?

There are important differences between FHA loans with 15-year mortgages and 30-year loan terms. Those differences include the number of years you’ll pay but also how much interest you may owe. What do you need to know about the fine points of selecting a loan term for your mortgage? The Start Of Your 15 or 30-Year Loan Term 15-year and 30-year mortgages typically start their loan terms the month you and the lender agree upon in writing. Usually, this occurs sometime after closing day.  Will the actual time you pay on the loan be affected by your move-in date? In some cases, yes. If you have a construction loan, you might have to wait up to 12 months while the construction is happening. Once it’s completed and all inspections and | more...

 
Do You Need Down Payment Help?

FHA Home Loan Down Payments

Most home buyers will make some form of down payment, with exceptions for those using VA mortgages with no money down for qualifying servicemembers, veterans, and surviving spouses. There is also no-money-down USDA loans, but these are need-based and have income caps. By comparison, FHA mortgages, with their low 3.5% down payment requirements, are attractive to many house hunters who want to save more money upfront on the mortgage. Do You Really Have To Put 20% Down? Some borrowers may hear stories of borrowers being required to pay 20% down. This would be true in cases where the home buyer wants to avoid mortgage insurance on a conventional mortgage. And while that is not the only down payment option offered in such cases the mere idea of paying 20% down | more...