Articles Tagged With: Mortgage Insurance

August 22, 2024

Comparing FHA Mortgage Insurance to Conventional Mortgage Insurance

There are two types of mortgage insurance: private mortgage insurance (PMI) and Federal Housing Administration (FHA) mortgage insurance. Each has a specific use and purpose and its own price tag, which may vary depending on circumstances. We examine some important facts about each type below. What To Know About Mortgage Insurance Private Mortgage Insurance (PMI) PMI protects lenders if a borrower defaults on a loan with less than a 20% down payment. Lenders consider this insurance necessary for loans that are viewed as higher risk. PMI typically has stricter eligibility criteria than FHA mortgage insurance. Borrowers often need good credit scores (680 or higher) and a debt-to-income ratio of 43%. The cost varies depending on the borrower’s credit score, down payment amount, loan term, and the insurance provider. It is | more...

November 8, 2021

FHA Mortgage Relief Still Available For Those Affected By COVID

By Joe Wallace

If you have trouble making your monthly FHA mortgage loan payments, you are not alone. There seem to be so many borrowers struggling that the FHA and HUD have announced multiple extensions to COVD-19 mortgage forbearance policies. Indeed, there have been so many updates and extensions to FHA loan policy in this area that it’s hard to keep it all straight. What’s the most current guidance from the FHA and HUD regarding those who need FHA loan forbearance due to COVID-19 pandemic issues? On September 27, 2021, the FHA issued a Mortgagee Letter, FHA ML 21-24, which explains to lenders the current FHA policy toward such mortgage relief: “Upon Borrower request, Mortgagees must offer a COVID-19 Forbearance to any Borrower that experiences an adverse impact on their ability to make | more...

September 2, 2021

Advice For Homeowners Affected By Natural Disasters in 2021

By Joe Wallace

American homeowners have been hard hit by natural disasters in 2021; everything from forest fires to hurricanes and tropical storms have beset homeowners on both coasts and in many places in-between. Add to that the complications of the COVID-19 pandemic and you get a lot of financial hardship for those who have had to evacuate, and for those who have experienced lost or damaged homes and property. The FHA and HUD have specific disaster-relief policies for those affected by natural disasters; if you have been affected by a storm, fire, or any other type of natural disaster it’s vital to contact your participating lender immediately to discuss your home loan options during the recovery phase. FHA loan rules for those affected by natural disasters may include limited foreclosure moratorium procedures | more...

July 19, 2021

FHA Mortgage Insurance Options

By Joe Wallace

There are plenty of things you might need to know about the FHA mortgage insurance premium, but if you are a first-time home buyer there are some aspects about this you should know about as early as possible so you can make the most informed choices possible about your home loan, what to finance, and how much to save. Learn Your Options Getting ready for a home loan means learning which items you have the option of including in the loan amount and how much you will pay over the lifetime of the loan on interest rates on the amount of your loan AND the add-ons you choose to include. And that’s where understanding FHA mortgage insurance becomes very important. One thing some people initially get confused over? Mistaking PMI | more...

May 20, 2021

Mortgage Insurance And Homeowner’s Insurance

By Joe Wallace

No matter what kind of home loan you apply for, you will have issues related to mortgage insurance to brush up on. Are you a first-time homebuyer? Do you have experience buying a home? In either case, there are things to remember. Some new to buying a home assume (mistakenly) that some kinds of insurance are universal. Then there are those who confuse mortgage insurance with homeowner’s insurance. This is not an unusual mistake to make, but it can cost you. What do you need to know about insurance issues? The first thing involves who is protected under the insurance plan. Mortgage Insurance Premiums (MIP) If you want to avoid paying for mortgage insurance on a conventional loan, you are generally required to put a whopping 20% down. When it | more...

May 5, 2021

Comparing Mortgages: Conventional 97 Loans Versus FHA Home Loans

By Joe Wallace

For low down payment requirements, the FHA mortgage is a home loan that has appealed to a vast number of people. It features a down payment of only 3.5% and has many perks such as no penalty for early payoff of the mortgage. FHA home loans are government-backed mortgages, which means lower risk for the lender. That government guarantee means your lender may offer lower FICO score requirements for FHA borrowers–one major benefit of FHA home loans for some is that lower FICO score bar plus the 3.5% down payment requirement. But it isn’t the only low down payment home loan option; there is a conventional home loan product called the Conventional 97 with an even lower down payment of three percent. Is this a smarter option than an | more...

April 28, 2021

FHA Condo Loan Rules That Affect Your Mortgage

By Joe Wallace

Some house hunters are surprised to learn that FHA home loans are possible for condo units. There is an assumption that FHA loans are only for first-time home buyers looking for starter homes, but ANY financially qualified applicant can apply to buy a single unit home, a multi-unit property, or a condo unit. FHA condo loans are similar in many ways to other purchase loans for suburban homes, but you should know the differences in buying and owning a condo versus other property types. FHA Condo Loans And The Condo Project Approval List FHA loans have requirements for condos or condo units–these usually must be on or added to the FHA approved list. Borrowers may look for an approved condo project using a tool on the FHA official site or | more...

April 16, 2021

Learn More About Home Loans: Appraisals & Inspections

By Bruce Reichstein

It’s important to learn as much as you can about the home loan process when planning and saving for your new mortgage. If you are a newcomer to the home loan process, there are some good resources that can help you be more informed borrower. The less informed you are, the more likely you are to have some kind of regret at the end of the home loan process. The more you know, the more confident you will feel about your choices along the way. One important issue for many borrowers is the FHA appraisal process. Are you in-the-know about what happens during the appraisal, what it is intended to do and why you should never trust the appraisal to provide you the information that only a complete home inspection | more...

September 4, 2019

HUD Disaster Resources

By Bruce Reichstein

The Department of Housing and Urban Development is reminding homeowners of the disaster resources available from federal agencies including HUD, the FHA, FEMA, and more. Those in federally declared disaster areas are eligible for special FHA home loan forbearance and other foreclosure avoidance measures. But loan forbearance and foreclosure avoidance are NOT automatic. All home owners still paying their mortgages at the time of the disaster should contact their lenders to discuss next steps and how to make arrangements to avoid home loan default and foreclosure. Lenders cannot help borrowers who do not do so, and it pays to be proactive, especially where FHA mortgages are concerned. FHA Foreclosure and Loss Mitigation Policy FHA lenders are given freedom to use “reasonable judgment in determining who is an ‘affected borrower’ in | more...

July 15, 2019

FHA Home Loans And Flood Hazard Areas

By Joe Wallace

FHA home loans have rules for loan approval that include determining if a house is suitable for the mortgage. In some cases a home might not be approved for a mortgage because of its’ condition, but in others the location of the home may be a problem. This is true in cases where a home is located too near a high pressure gas pipeline, high voltage lines, or mining operations. But there is another aspect of this you should know-the FHA loan rules for homes located in certain areas prone to flooding. FHA loan rules in HUD 4000.1 state that the lender is responsible for making sure the property to be purchased with an FHA mortgage is not located in certain government-designated flood zones. From HUD 4000.1: “The Mortgagee must | more...