October 18th, 2009 — Mortgage Loans
According to the FHA policy issued on May 11, 2009, home buyers interested in FHA mortgage loan can get a short-term “bridge loan” in order to take advantage of their 2009 First Time Homebuyer’s Tax Credit. This way the FHA borrowers can use the loan as a down payment on their homes. In short, this helps borrowers buying their first primary residence to get a tax break up to $8000. Well, the tax break can only be claimed for purchases made in the 2009 tax year, so if you have still not availed the opportunity, you can still avail it.
As per initial laws, banks could offer bridge loans to borrowers so they could use their IRS money as a down payment on an FHA home loan, but later it appeared to be forbidding banks from offering down payment assistance. The revised rules let the FHA home loan applicants apply for these bridge loans, but you cannot use the loans to meet the FHA’s minimum 3.5% down payment. You can use money for other expenses.
October 11th, 2009 — Mortgage Loans
By having a careful look at FHA guidelines, you do not only save your time, but also make the process smooth. It’s good if you have a checklist to confirm that all the important requirements are duly fulfilled. Well, here’s list of required information that loan officer may need so keep it ready:
- Residential address (Past two years)
- Your Social Security numbers
- Names and addresses of your employer (past two years)
- Your current gross monthly salary
- Pertinent information for all checking and savings accounts
- Pertinent information for all open loans
- Complete details of all real estate you own
- Approximate value of all personal property
- If you’re a veteran, you’ll need certificate of Eligibility and DD-214 too
- Current check stubs and your W-2 forms (past two years)
- Personal tax returns (past two years), current income statement and business balance sheet for self-employed individuals
By following FHA guidelines, you won’t have much complications and whole of the process will go smooth too.
October 8th, 2009 — Mortgage Loans
Mortgage insurance is an amount charged to the homeowner each month at the rate of .5 percent per year of the total loan amount. An upfront mortgage insurance premium of 1.5 percent is also charged by FHA. If mortgage loan is of 15 years and less and the loan to value ratios are 89.99 percent and below, the annual mortgage insurance premium is not charged. In other cases, it will be canceled as per following situations:
Mortgages With Terms 15 Year Or Less
For 15 years and less mortgages, whereby Loan to Value ratio is 90 percent and greater, annual premiums will be canceled when the Loan to Value ratio reaches 78 percent regardless of the amount of time the mortgagor has paid the premiums.
Mortgages With Terms More Than 15 Years
For more than 15 years mortgages, the annual mortgage insurance premiums will be canceled when the Loan to Value ratio reaches 78 percent, provided the mortgagor has paid the annual premium for at least 5 years.
September 26th, 2009 — Home Buyer, Home Loans, Mortgage Loans
Government-insured (Federal Housing Administration) FHA loans now make up about 25% of the mortgage market. Here are five reasons you should consider an FHA loan, if you’re looking to purchase a mortgage loan:
- Chances are good that you’ll come across one.
- Borrowers can qualify with any income. Historically FHA loans have gone mostly to low-income borrowers. But, in fact, there’s no cap on what someone can earn.
- Expect a tough appraisal. The home will need a clean bill of health from a government-approved appraiser, and the seller must fix any issues before a buyer can close on the loan.
- These loans are pricier than they seem. Nominal rates on FHA mortgages are comparable to those on conventional loans. But hefty fees on the FHA variety up the cost.
- They’ve gotten easier to obtain. FHAs once had a well-deserved rep for onerous paperwork and a longer, more difficult closing than conventional loans. But thanks to a new automatic underwriting system and the looser repair requirements, FHA mortgages take only a few days longer than conventional loans to close, says Bill Banfield, a vice president at Quicken Loans.
September 2nd, 2009 — Mortgage Loans
Before Applying for an FHA Loan, it’s always good to look at FHA Loan Requirements. By doing so you actually get two way benefits:
You save your time by not looking for unnecessary documents and stuff.
You get a streamlined way for quick approval.
FHA Loan Requirements are actually not hard to meet as people with poor credit history can also obtain the FHA insured loans. One thing you must know that FHA is not a loan provider but it provides the insurance on private mortgages. Most of the FHA loan programs are meant for the first time home buyers, but if you’re the borrower with adjustable rate mortgage and want to have facing for the risk of foreclosure you can also avail FHA Secure Program. The basic FHA loan requirements that must be met by every borrower are:
- Valid citizen of US
- Borrower must have Social Security Number (SSN)
- Must have attained a legal age to sign mortgage documents (state specific)
Along with these, you must also look carefully at following FHA Loan Requirements:
- Steady employment for two years
- Any bankruptcy must be two years old
- The foreclosure must be three years ago
- The mortgage payment should be 30% of the gross monthly income
- The minimum credit score should be 580
This quick read of two minutes can save your two months. Also look at FHA Loan Qualifications
August 18th, 2009 — Mortgage Loans
It’s always good to know the FHA loan qualifications before applying. Being prepared is half the battle, so once you know the FHA loan qualifications, you’re half done with your loan process. It’s good, because, you can have fair idea of the lender, market and other circumstances, and hence you can make right and smart choice. Here goes the quick overview of all what you should know:
- FHA will insure you a loan only if is it your primary residence. If you’re a first time buyer, Investor or purchasing a home to rent it out, you’re not eligible for this type of financing.
- The maximum loan amount is determined by the federal government. Generally, FHA allows a 96.50 loan to value ratio. However, there are special circumstances that may require additional down payment, like when purchasing from a close relative.
- Although FHA does not require a minimum credit score, the lender, however, will require a minimum credit score requirement.
- One important part of an FHA loan is the employment requirement that determines whether or not you will be able to pay back the loan appropriately. You must have 1 to 2 years continuous employment history.
- FHA established 41% as their guideline for debt to income ratio, which can be up to 45% in some cases.
- Your down payment on your home must be 3.5%. You can make more down payments too.
- You must also have to prove the home “habitable”, means no leaky roofs, running water, electricity outage etc. Another thing is that if property needs improvements, and the seller is not willing to make the improvements, the home may not qualify for an FHA loan.
August 16th, 2009 — Mortgage Loans
According to a report by Baltimore sun, 75 percent of homes sold in the Baltimore metro area went to buyers with conventional mortgages,i.e. loans not insured by government agencies. Further, it says that 35% of the Baltimore-area buyers got conventional loans last month, 40% of Baltimore-area buyers went FHA in July, according to MRIS. The news report says that, the number of FHA-financed purchases jumped ninefold from four years ago, even though total home sales fell by almost half.
VA loans are not behind in this situation, and are popular too. Although not all buyers went for mortgages, and some of them had 100% down payment from other sources, but out of the mortgage bases home purchasing FHA and VA loans have got lead.
August 12th, 2009 — Mortgage Loans, Mortgage Rates
Since 30 years mortgage rates have increased during this week, FHA loan rates are likely to move up in the next few weeks. Over the last week, the mortgage rates have been observed moving up to 5.5% even from 5.05. This huge jump was to be expected as the 10 year treasury yield has moved up greatly in the last few weeks.
When the 10 year yield moves up, mortgage rates moving up is very normal. Knowing this, if you plan on refinancing or buying your first home, it would be very smart to speed up the process now rather than later.
If you’ve come across the advertisements over the Internet and television for mortgage rates under 5%, this is the best time to inquire, and in fact speed up your mortgage loan application process. If you wait a few months or even a few weeks, you might be staring at mortgage rates in excess of 6%, so make most of it before it’s too late.
July 29th, 2009 — Mortgage Loans, Mortgage News, Mortgage Refinancing
FHA loan rates are expected to go after mortgage rates this week and that could very well be higher. The 10 year rate yield has stirred up so it is very likely that mortgage rates will tag along. The last time that the 10 year yield moved much higher and mortgage rates did not shift, a one day move of over .75% in average mortgage rates has been seen then. Unluckily, this move was to the up side rather than the down side. If that would be the case today, mortgage rates would have gone over 6%.
If mortgage rates progress this much higher, expect to see FHA loan rates following them higher. If you have been planning to have refinancing or getting your first mortgage, this is possibly the best time to do so. Later, even if you wait a few weeks, you could see average mortgage rates going above 6% which will bring FHA rates higher as well.
The one good thing is that you are aware of the situation now and you can take action for getting the mortgage application process in progress.
July 8th, 2009 — Home Buyer, Home Loans
There may be various other reasons for which first time home buyer should opt for FHA loans, but here are some tops ones:
- FHA loans only require minimum down payment, i.e. 3.5%.
- You may get the allowances for past credit problems with a FHA Loan.
- There is a shorter time from bankruptcy before you are eligible.
- With FHA Loans. the first time home buyer also qualifies for the $8,000 Tax Credit.
- FHA appraisals do not have to be ordered through the HVCC (Home Value Code of Conduct).
If you’re also a first time home buyer, you must not ignore the FHA loan option. To discuss it in detail with us fill out the form here or call us at
