Articles Tagged With: First-time Home Buyer

February 21, 2024

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...

February 15, 2024

Home Loans: When To Get Pre-Approved

By Joe Wallace

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...

February 14, 2024

First Time Home Buyers Should Know These FHA Loan Rules

By Joe Wallace

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...

February 13, 2024

FHA Loans Versus Other Government-Backed Mortgages

By Joe Wallace

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...

February 5, 2024

FHA Loan Terms: Which To Choose?

By Joe Wallace

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...

February 2, 2024

FHA Home Loan Down Payments

By Bruce Reichstein

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...

January 30, 2024

Five Reasons To Buy Your First Real Estate With An FHA Home Loan

By Bruce Reichstein

FHA home loans are a great way to make your first real estate purchase. Are you looking at homes for sale and trying to decide the best mortgage loan for you? If you are a first-time home buyer and feel confused by what your real estate agent finds in MLS listing data while searching for “houses near me”, remember that the FHA mortgage loan option is available to anyone who financially qualifies. If you are talking to a real estate agent, do not forget that FHA loans are not restricted to first-time homebuyers or those who have never owned property. You can own other property and still buy a home as your primary residence using an FHA loan whether you’ve purchased another property or not. #5: FHA Loans Are Guaranteed | more...

January 26, 2024

What You Should Know About FHA Loans And Lender Standards

By Joe Wallace

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...

January 23, 2024

Planning & Saving For Your FHA Loan

By Joe Wallace

House hunters need to save cash when planning to buy a house in the new year. Some things have always been on the list but have, in more recent times, become more important to consider while in planning mode. FHA Home Loan Down Payment Issues To Know The down payment issue is non-negotiable for typical FHA loans, money down is required. However, you might be surprised by your options when saving for it. You’ll need to save a MINIMUM 3.5% down payment, but in 2024, you may want to consider making a bigger down payment. It can help you save on interest rates over the loan term. There are variables, including whether or not you choose to finance closing costs, and those are factors to consider and ask the lender | more...

January 19, 2024

Who Qualifies For FHA Loans?

By Joe Wallace

Whether you’re interested in building a house from the ground up on your own lot or need a mobile home or condo unit, there is an FHA home loan for you. Who qualifies for these mortgages and why? FHA Loans For First-Time Home Buyers FHA mortgages are open to first-time homebuyers without perfect credit. You can apply for an FHA home loan even with past credit mistakes. The best thing to do is review your past credit and ensure your home loan application is turned in once you have a full year of on-time payments on your credit record. First-time borrowers should know an FHA mortgage, even an FHA One-Time Close construction loan is within their reach thanks to low 3.5% down payment requirements and the ability to get down | more...