April 19, 2019

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Articles Tagged With: Principal and Interest

Buying A Starter Home With An FHA Mortgage

What Is My FHA Home Loan Interest Rate?

What is my FHA home loan interest rate? Borrowers want to know because it affects the overall cost of the mortgage for the lifetime of the loan, and when you are buying a home with an FHA mortgage (or any other kind of home loan) it’s important to think long-term; knowing how the interest rate affects your loan costs is a detail worth learning more about. But interest rates on FHA home loans are not (to the surprise of some) set or regulated by the FHA or HUD. The only real guidelines for basic FHA loan interest rates are that the rates must be applied in a manner that is reasonable and “customary” for the housing market you are buying in. The FHA does have regulations on how Adjustable Rate | more...

 

The Down Payment Requirement For FHA Loans

FHA home loans, much like their conventional counterparts, have a down payment requirement. However, unlike conventional loans, the minimum down payment requirement for FHA mortgages is 3.5% of the adjusted value of the home. This lower down payment requirement is one of the main advantages of the FHA mortgage. The basic amount of the down payment varies with each FHA mortgage since the payment is based on the value of that particular home. Additionally, FHA mortgages require a specific FICO score range (580 or better) for maximum financing. Borrowers with FICO scores between 500 and 579 will be required to put down 10% instead of 3.5%. Additional lender standards may also apply. Calculating the amount of your down payment is only part of the process. FHA borrowers must provide down | more...

 

How Soon Can I Refinance? No-Cash Out FHA Refinancing

Do you have an existing FHA loan and want to know how soon you can refinance it? Are you paying a monthly mortgage payment on a conventional loan and want to refinance into an FHA mortgage? Refinancing can help borrowers get into lower mortgage payments and/or interest rates, but FHA refinance loans are also helpful for getting into a fixed rate loan and out of an adjustable rate. As you can tell from that brief list of refinance options, not all refinance loans are the same. In a previous blog post we discussed the rules for FHA cash-out refinance loans. Now let’s look at how soon you can refinance a mortgage loan with no cash out. The rules for FHA no cash out “rate-and-term” refinancing loans are found in HUD | more...

 

Qualifying For An FHA Cash-Out Refinance Loan

Qualifying for an FHA cash-out refinance loan is much the same as qualifying for an FHA “forward mortgage” or typical new purchase loan. Since this type of refinancing involves money back to the borrower, the lender is required to run a new credit check and the usual credit requirements will apply even for those who are repeat customers for a particular lender. Credit Activity When you are preparing for your FHA cash out refinance loan, you’ll need to observe the same rules about credit that you did when you applied for your original mortgage. That means avoiding new credit card applications and other types of credit leading up to your refi loan paperwork. Why? Every time you apply for new credit, a “hard inquiry” is listed on your credit report. | more...

 

FHA Loans For Additional Homes: A Reader Question

Are FHA loans for multiple properties possible? That’s what’s on one reader’s mind recently. “So is there a maximum number of properties one can theoretically have under FHA guidelines?” “Say for example a person owns a home in one city with an FHA mortgage and then has to relocate to another city for job reasons. While in this city there family size increases by several individuals via marriage and or kids. Would that person be able to get a 3rd FHA? mortgage.” This reader question about FHA loans is in response to a blog post we did recently about the issue of applying for another FHA mortgage while currently paying on an existing FHA home loan. The gist of that post is that while FHA loan rules do not generally | more...

 

FHA Loans And The 100 Mile Rule: A Reader Question

A reader asked us a question about FHA loans and “the 100 mile rule”. “I am currently looking to purchase a home with FHA financing 5 miles from my current home in California. The current home I own is secured with a conventional loan. I would like to rent this home out and buy a larger home and finance it FHA because I dont have very much saved up for a larger down payment. Does the 100 mile rule apply to me?” The reader is asking in response to a post we made earlier this year about military FHA borrowers and occupancy rules for FHA loans. This quote from that original post, referencing FHA loan rules in HUD 4000.1, seems to be the issue of most concern for the reader: | more...

 

FHA Mortgage Occupancy Rules

A reader asked us a question this weekend about FHA mortgage loan occupancy rules. “I purchased a home with an FHA loan and intended to live in it for 4 years until my fiancee got orders to relocate with the Air Force. Wellhe got orders to move from Colorado to Florida but I just purchased my house 3 months ago. Can I not leave Colorado and move with my fiancee?” HUD 4000.1, the FHA single-family home loan rule book, addresses situations like these, stating: “Borrowers who are military personnel, who cannot physically reside in a Property because they are on Active Duty, are still considered owner occupants and are eligible for maximum financing if a Family Member of the Borrower will occupy the subject Property as their Principal Residence, or | more...

 

FHA Loans With A Non-Occupying Co-Borrower

How does having a non-occupying co-borrower affect your FHA mortgage? What happens if one of the borrowers decides they want a change in their status as occupying or non-occupying? A reader asked us a question along these lines recently in the comments section: “I just purchased my home in November 2016 with my husband’s uncle as a co-borrower (not living in the property). Now he is getting a divorce and his soon-to-be ex-wife wants the househe basically just helped me qualify of put the down payment to purchase and pay the mortgage on my ownhe even signed hes rights to the title the day we signed for the property is I was told. I could put in that paper after about 6 months of having the property but now I | more...

 
What is an FHA cash-out refinance loan?

Buying A Home From A Family Member

Is there a penalty of some kind for purchasing a home from a relative when using an FHA mortgage? A reader asked a question about that recently in our comments section. “I would like to purchase my father-in-laws home. He passed away 2 1/2 years ago. His estate was left to my brother-in-law and my two daughters since I was divorced from his son many years ago and he passed away 17 years ago.” “We have been keeping up and the utilities have been in service since then and we have been keeping the house up cleaning and painting it. The house appraised $109K. My question is: for me to purchase the house through FHA do I have to have been living in the house for a year and the | more...

 

Types of Homes Eligible For FHA Mortgages

What kinds of property types can be purchased with an FHA mortgage loan? It’s a simple question, but there are some occasional misconceptions about FHA requirements for single family homes that borrowers should know about as they plan their mortgage. There are rules on eligible property types that can be purchased with an FHA mortgage loan. These rules are found in HUD 4000.1, and include the following guidance to the participating FHA lender: “FHAs programs differ from one another primarily in terms of what types of Properties and financing are eligible. Except as otherwise stated in this SF Handbook, FHAs Single Family programs are limited to one- to four-family Properties that are owner-occupied Principal Residences.” The phrase, “owner-occupied principal residences” is an important one-FHA mortgage loan rules include an occupancy | more...