May 13, 2024 | Buying Real Estate, Mortgage Guidelines, Mortgage Lenders
The FHA is insuring a greater percentage of loans than during any time in recent history. In 2006, it insured roughly 5 percent of the purchase mortgage market. Today, it insures one-quarter. “Going FHA” is more common than ever before — but is it better?
The answer — like most things in mortgage — depends on your circumstance.
Like its conforming counterpart, an FHA-insured mortgage is available as a fixed-rate loan and as an adjustable-rate one. Payments are made monthly and come without prepayment penalties.
That’s where the similarities end, however, and decision-making begins. For homeowners and buyers across Worcester , FHA mortgages carry a different set rules as compared to conforming loans through Fannie Mae or Freddie Mac that can render them more — or less — attractive for financing. (more…)
Apr 19, 2023 | Real Estate
If you are looking for a way to save money on the purchase of your next home, you might be thinking about buying a property that requires repairs. Keep in mind that you will not be able to move into this property right away, so is it the best option? You could open the door to unique financing options that could make it easier for you to purchase your next property.
FHA 203(k) Rehab Loan
One of the best options available is an FHA 203(k) rehab loan. This is a convenient option because it allows you to finance both the purchase price of the property and the price of any repairs that you want to do. You do not have to worry about taking out multiple loans, and you might be able to qualify for a lower interest rate. You might also be thinking about taking out a home equity line of credit or putting the cost of the repairs on credit cards, but you can save a significant amount of money by bundling everything together.
Standard Vs. Streamline
Next, you need to think about which type of FHA 203(k) loan you want. The first option is the standard loan. It is a great option if you have lengthy, expensive repairs as it does not have a maximum amount of money you are allowed to spend on the repairs themselves. It is a great option if you need to rehab the garage, modernize the bathrooms, or remove health and safety hazards. The other option is the streamline loan, which allows you to tap into your funds quickly and easily. You can finance repairs up to $35,000, and it is ideal if you have to replace the HVAC system or work on the plumbing.
Think Carefully About Buying A Fixer Upper
Even though you might be able to save money on the purchase price of your house by purchasing a house that requires repairs, you need to think carefully about how you finance the project and how much money you plan on spending on repairs.
Dec 24, 2020 | Real Estate Tips
The coronavirus pandemic has had a massive impact on everyone. This pandemic has led to massive economic issues as well. Given the ongoing crisis as it relates to student loan debt, many students are wondering how the pandemic is going to impact their student loans and how their student loans are going to impact a potential mortgage payment. There are a few points to keep in mind.
Freddie Mac
In general, loans backed by Freddie Mac are going to use the student loan payment that is marked on the credit report. If this amount is $0 or unknown, then the lender is going to use 0.5 percent of the outstanding loan balance. This should also be reported on the credit report. Then, the lender will provide the borrower with information on possible mortgages.
Fannie Mae
When it comes to loans that are backed by Fannie Mae, students might still be on an income-driven repayment plan. In this case, the monthly payment might be zero and the lender may qualify a potential borrower with this $0 payment. On the other hand, if the loans have been deferred or are in forbearance, then the lender may calculate a payment that is equal to approximately 1 percent of the remaining balance on student loans.
FHA Loans
For individuals going through FHA, the lender is going to run a few calculations. The lender may look at one percent of the remaining balance on the loan, the monthly payment that is reported on the credit report, or the actual documented payment as long as the borrower provides ample evidence. The lender will likely use the greater of these amounts in calculations.
Why Do These Student Loan Payments Matter?
Credit reports are an essential part of the home-buying process. It is critical for everyone to understand what their student loan payments are and how they might impact their credit report. Furthermore, their student loan payments are also going to have an impact on the monthly mortgage payment they can afford. Therefore, it is important for everyone to make sure the information documented on their credit report is accurate when it comes to their student loans.
Apr 4, 2018 | Home Seller Tips
Before an owner can market a property to buyers that want to use a FHA loan, he will want to familiarize himself with the FHA’s standards. FHA won’t insure loans on just any property. While their standards aren’t as stringent as they used to be, a home needs to be in relatively good condition to qualify for FHA financing.
Location and Lot
To qualify for FHA financing, the property has to be located on a road or easement that lets the owner freely enter and exit. The access also has to be paved with a surface that will work all year — a long dirt driveway that washes out in spring won’t qualify.
The FHA also wants the lot to be safe and free of pollution, radiation and other hazards. For that matter, it also needs to provide adequate drainage to keep water away from the house.
Property Exterior
The FHA’s requirements for making a loan start with the home’s roof. To pass muster, the house must have a watertight roof with some future life left. In addition, if the roof has three or more layers of old shingles, they must all be torn off as part of the replacement process.
The property’s exterior has to be free of chipped or damaged paint if the home has any risk of having lead paint. Its foundation should also be free of signs of exterior (and interior) damage. It also needs full exterior walls.
Property Interior
The property’s interior also needs to be inspected. FHA standards require that the home’s major systems be in good working order. Bedrooms should have egress routes for fire safety and the attic and basement should be free of signs of water or mold damage.
The bottom line is that the FHA wants to make loans on homes that borrowers can occupy. This doesn’t mean that a home has to be in perfect condition to be sold to an FHA mortgage-using borrower. It just needs to be a place that they can live.
Contact your trusted real estate professional to discuss these issues as well as any other questions regarding the sale of your home.
Jun 7, 2012 | Mortgage Guidelines
Beginning Monday, June 11, the FHA is changing its mortgage insurance premium schedule for the second time this year.
Some FHA mortgage applicants will pay lower mortgage insurance premiums going forward. Others will pay more. The new premiums apply to all FHA mortgages, both purchase and refinance.
The MIP update will be the 5th time in four years that the FHA has changed its mortgage insurance premium schedule.
FHA-backed homeowners who have not refinanced within the last 3 years will benefit from the new MIP. This is because, beginning with all FHA Case Numbers assigned on, or after, June 11, 2012, homeowners whose current FHA mortgage pre-dates June 1, 2009 will be entitled to (more…)
