Category Archives: FHA Home Loans

100 Percent Mortgage Financing – Qualifying for a FHA Loan

Posted on by
Reply



If looking for a no money down or 100 percent mortgage financing, you have several options. Understandably, many homebuyers have little cash on hand for a down payment. Because of the increase in home prices, saving the typical 20% is practically impossible. Fortunately, FHA home loan programs offer 100 percent mortgage financing, which eliminates the need for a large down payment. Here are a few tips on qualifying for a FHA home mortgage loan.

Employment Guideline for Getting a FHA Mortgage Loan

FHA loans are very flexible. Still, before approving a homebuyer for a FHA loan, the lender will carefully review several factors to determine whether they are an ideal candidate for a mortgage loan.

To acquire a FHA loan, lenders require steady employment. Usually, this involves two years of continuously working. It helps to maintain the same employer throughout the two years.

Individuals who change employers every four to six months or those who only held employment for half of the 24 months may have a hard time getting approved for a FHA loan. If unemployment was due to layoffs, illness, or other legitimate excuses, the lender may consider the applicant for approval.

Credit Guidelines for FHA Loans

When reviewing a homebuyer’s application for a mortgage loan, the lender will look at all credit activity that has occurred within the last two to three years. Concerning late payments, applicants cannot have more than two 30 days late payments within a two year period.

Bankruptcies must have a discharged date of at least two years. Furthermore, foreclosures must be at least three years old. In both cases, mortgage lenders require that homebuyers have begun re-establishing credit and building a good credit history.

Income Guidelines for FHA Loans

To qualify for a FHA mortgage loan, lenders will evaluate combine household incomes and other consumer debts (auto loan, credit cards, student loans, etc) to ensure that the mortgage payment does not exceed 30% of income. However, FHA loan lenders are flexible in this regards. Because of rising home prices and modest incomes, lenders may approve loans that exceed 30% of the homebuyer’s income.

California Home Loans With New FHA Guidelines

Posted on by
Reply



For those in California home loans with the FHA are coming under new guidelines beginning January 1, 2010. People in California need to be aware of the changes so that they can make the best decision for their own finances. Congress recently passed a bill that will extend the current FHA loan limits for 2010. Presently California FHA loan limits are capped at $625,500 in specified high cost regions.

What are the changes and what do they mean? Current California home loans with the FHA are relatively easy to get. They require no appraisal at this time. There is no maximum loan to value ratio and there is no asset verification. Income verification is not required and lower credit scores can qualify. And right now, because of the lack of these traditional restrictions, there are quick turn-rounds available on these loans. This has made California FHA loan refinances extremely popular with many people looking to lock in a lower rate. But time has become of the essence. This is going to change at the beginning of 2010.

On January 1, 2010, California mortgage loans with the FHA will become more difficult to get. If the home owner wants to roll his closing costs into the mortgage, an appraisal is going to be required, and it is now recommended in all cases. Without an appraisal, the new loan amount cannot exceed the principal due plus the new up-front mortgage insurance premium. The maximum loan to value ratio is going to be no more than 97.75%. If a homeowner wants to lower their rate by purchasing discount points, those cannot be rolled into the mortgage. Assets and income are going to have to be verified before approval. The homeowner also must be employed at the time of application. And there will be tighter credit restrictions as well. With these added restrictions, quick turn-rounds will be a thing of the past. All of these changes will likely not lower the FHA refinance’s popularity. But it will make it available to fewer people.

Given these changes, FHA borrowers with California mortgage rates that are adjustable need to make decisions on FHA refinancing. If the tighter restrictions will make their hopes of refinancing fade, they might want to get the process done prior to the end of 2009. That means getting their loan documentation submitted and approved quickly. However, if they can live with the tighter restrictions, it might pay to wait until the beginning of 2010. It depends on the individual homeowner and their situation. Speaking with a California mortgage professional will help you make the refinance decision that is best for you.

FHA Loans on the Rise to Stardom

Posted on by
Reply



Getting an FHA loan used to be a person’s last choice when sales of homes were thriving. Prospective homebuyers did not want to go through all the documentation and sellers didn’t like the requirement by FHA for any needed repairs to be completed before closing.

Now that home prices have been declining, asking for a FHA loan has become routine.

Mortgages insured by the Federal Housing Administration are enjoying a crowd pleasing comeback due to lenders making it difficult to be approved for conventional loans. People who have refinanced or bought a home this year using an FHA loan has increased over last year by well over 150 percent and refinances by almost four times as much. It is due in large part to the fact that the FHA only requires 3 percent down for buyers. For an existing homeowner, they only need to have at least 3 percent equity and be able to fully document their income. What’s more, a borrower can have not so good credit including a recent mortgage late.

FHA mortgage loans are originated by lenders, similar to other home loans, but are federally insured by the government. The typical conventional home loans are different because it needs insurance by private mortgage insurers when a borrower brings in less than 20 percent down. In addition, since minimum credit scores for class “A” loans, also called prime credit, have increased FHA has gained borrowers because there is no so-called minimum credit score for FHA. Although, people in the business know the threshold is closer to 560 credit scores. Nevertheless, FHA will qualify potential borrowers on their financial history, their current income and if they have sufficient income to cover their current and proposed new debt, a FHA mortgage.

Coming changes in FHA

The federal housing rescue bill that passed legislation will raise the down payment by FHA borrowers beginning October 1, 2008 to 3.5 percent from 3 percent. Buyers are not eligible to receive down payment assistance from nonprofits or sellers. Spokespersons for the FHA claim it is due to taking on more risk than they normally would. So, they would like to be compensated for the increased risk.

Plus, the FHA will increase its fees on Oct. 1. The majority of borrowers will continue to pay upfront 1.75 percent mortgage insurance premiums based on the loan amount versus the normal 1.5 percent along with yearly premiums of 0.55 percent versus 0.50 percent.

Federal Housing Administration Loans – FHA Loans Explained

Posted on by
Reply



FHA home loans are a type of loan provided to Americans through the government. FHA stands for Federal Housing Administration. The FHA home loan was devised during the Great Depression, when families were suffering from high foreclosure rates and income was minimal. The idea was to offer a product lower income households could afford, as well as to provide insurance for the lenders. Current FHA loans are designed for individuals who cannot afford a down payment or do not qualify for a private mortgage option.

FHA home loans are given through private lenders; however it is the FHA program that insures the loans thus making it a viable option for certain borrowers. Since the program is set up in this way, it is possible to speak with multiple lenders regarding FHA home loan options. Borrowers can even obtain a mortgage broker to help them work the deal. The lenders are able to set their own rates and terms regarding the FHA home loans. Efforts in comparison shopping, even on FHA loans, are imperative since each company can vary.

FHA loans work similar to your standard mortgage. The lender will assess the borrowers risk on a number of levels. The most important aspect of a borrower risk assessment is debt to income ratio. It will signify if the borrower has too many debts to allow a loan. Most mortgages require that your debts be less than 50 percent of your income. Therefore if your monthly income is $2000, you must have a total expense of less than $1000. The $1000 would also have to include your mortgage payment. FHA loans do not ask that your debts are less than 50 percent, but that you have the money to afford the mortgage and all other expenses. FHA loans can be awarded even if your debts are at a higher percent to your income.

Other factors lenders assess regarding FHA home loans include payment history on debts, your employment history, and other account history. The ability to pay your debts on time is important, but even if you have a discharged bankruptcy, low credit scores, and a slightly high risk you may still qualify as a borrower for FHA loans.

The qualification will be determined by the lender you choose. Some lenders may be more hesitant to loan money to high risk individuals even under an FHA loan. In the last month the FHA regulations have changed to become tighter for all borrowers. There is a new minimum for your credit score. The recent changes have occurred due to the subprime mortgage crisis, which began in 2007. As a result of the crisis many banks are suffering from low cash flow, thus lending is difficult.

FHA loans are backed by the government, but some banks still feel high risk borrowers may pose too high of a threat- even on FHA loans. Before applying for an FHA home loan a borrower needs to understand the new FHA regulations, and how they might be affected by them.

FHA Home Loans – What Are the Benefits?

Posted on by
Reply



Lots of people prefer to take loans through the Federal Housing Administration due to more advantageous conditions offered. An FHA home finance loan is insured against default. If the borrower fails with the payments, the FHA can pay; this makes lenders much more flexible with the loans, within the sense which they give larger amounts.

An excellent part of having an FHA home finance loan would be that the income does not matter, because it is not really a criteria for qualifying. Nonetheless, the income influences the amount you can borrow. The sum rely on the property prices in your community where you live, and in general, the money is fixed to a relatively small mortgage.

The credit record and also the debt to income ratio would be the elements that truly influence your qualifying for the FHA home finance loan. In terms of credit, your history doesn’t need to be the best, a significant situation is going to do to satisfy certain requirements. In case you speak with a financial consultant, he/she can clarify every aspect for you here.

Here are some more benefits of an FHA home loan:

-You can make an advance payment under 3% of the property’s value;
-You don’t have to pay any penalty price if you pay the loan before established by contract;
-You can also enjoy leniency in the event you face financial trouble;
-You can use other fha programs to pay for home improvement.

Additionally, there are some cons you need to be aware of prior to obtaining an fha home mortgage:

-The amount of money it is possible to borrow could prove insufficient to pay for the price of the home;
-You need to pay a monthly insurance premium and also a constant fee that’ll be used to pay your debt regarding default;
-There could possibly be other competitive offers that beat fha home finance loan programs.

Should you have a good credit history and a decent income, it is worth evaluating your options before choosing a mortgage loan program in particular.

Speak with a financial advisor to view what possibilities you can find in your case. Make comparisons between your various offers, and only then decide on the proper solution. It can be so essential to have a larger down-payment when possible. This is the time for you to use personal savings, money gifts from family so that you can decrease your debt as much as possible.

FHA First Time Home Buyer – Apply For FHA Loan

Posted on by
Reply



With the current credit market crunch and the slowing economy, home buying can be tough. Home prices are low currently in now’s the time to purchase a home, if you can qualify for a mortgage, that is. However, there is good news for would-be homebuyers that do not have great credit. FHA home loans are fairly easy to qualify for, and they provide the flexibility that a first time homebuyer may need in order to purchase a home.

Ever since the crash of the sub prime mortgage melt down, lenders have made it more difficult to qualify to purchase a home. Which makes the FHA home loan the best thing since sliced bread. An FHA home loan does not require as much of a down payment as a conventional loan would. The current down payment requirement for an FHA home loan is only 3%, compared to the mandatory 5% down payment on a conventional home loan. Also an FHA home loan will allow you to still purchase a home, even if your debt to income ratio is higher than 43%, however, you will need to have other compensating factors, such as cash reserves in the bank or a 401(k) plan with your employer. FHA home loans also have more relaxed credit requirements compared to the conventional mortgage.

With an FHA home loan, many negative things on a credit report, such as medical bills, will not play as big a role in qualifying for a loan. Some lenders will even approve a borrower with a credit score as low as a 550. This one caveat alone can be the difference between getting approved for a FHA loan and being turned down by a conventional lender. Another benefit with securing an FHA home loan would be the lower than typical interest rate.

As of October the first 2008, FHA stopped accepting seller down payment assistance programs. However, before this program ended, many homebuyers purchased homes with no money down.

The down payment assistance program allowed homebuilders and home sellers to give the seller the money necessary for the down payment, while also paying for the buyer’s closing cost. This is how homebuyers were able to do 100% home purchases. The current FHA home loan program does still allow for 100% financing, however the seller can no longer give the buyer money for the down payment, but a relative of the buyer can give or loan the money to the buyer. Thus, creating the 100% home purchase again. But keep in mind that if the buyer borrows the money from a relative or a close friend of the family, this loan will also count against your debt to income ratio. And again, as long as you’re debt to income ratio is below 43%. You should not have a problem getting this type of financing.

For more information on FHA financing Visit:

FHA Loans Are Great For People With Bad Credit

Posted on by
Reply



Federal Housing Administration or FHA loans for people with bad credit offer mortgage opportunities but the potential buyers must reside in America. FHA lending is a solution for people with below average credit and gives them a way to purchase new homes.

FHA sets up their program to service first-time buyers. Homeowners who want to purchase a second home can use FHA programs also. Refinance loans are available to homeowners. You can buy a home and save some cash on interest. FHA offers homeowners and first-time buyer’s lower interest rates.

FHA loans are available also to people who have good credit. The purpose of the loans it to give peoples a way to buy new homes, mostly first-time buyers. Just because you have, bad credit doesn’t mean you cannot get a loan. FHA offers loans for people with poor credit.

You can apply for the loans online to take advantage of the 100 percent financing loans with a down payment below 3 percent. FHA regulates closing costs. You never have to worry about FICO scores.

Before they approve you for a loan, the FHA will look at your credit report. The loan officer will review the report, searching for several factors. If you lost your job, been foreclosed on, or have repayments that need to be made, the loan application may be rejected. If you intend to move or transfer jobs the loan officer may reject your application also.

People with serious illnesses may not be eligible for FHA loans. Your condition may prohibit you from repaying the mortgage and the FHA will take that into consideration.

FHA Loans – Gaining Popularity Among Home Buyers

Posted on by
Reply



As FHA loans are becoming more and more popular among home buyers, it’s important to learn more about this kind of loan and also how these loans benefit home buyers. The Federal Housing Association (commonly referred to as FHA) was created in 1934 as result of Depression – a time when home loans and home ownership in general had suffered one of the largest decreases the country had ever seen.

This government agency was intended to stabilize the mortgage market (which would, in turn, help to stabilize the housing market), and it was also intended to provide more affordable financing for a larger range of people. When home buyers don’t have twenty percent of the home’s value to put down at closing, they’re required to get mortgage insurance. Buyers with little money down have to get this insurance because if they had to foreclose on the home, they wouldn’t lose very much (since they don’t have a significant portion of the home already paid for).

FHA loans were created as a kind of government subsidized mortgage insurance. In a nutshell, that’s really what an FHA loan is. The borrower pays a monthly premium as well as one upfront premium that is a percentage of the overall loan amount. In short, the idea behind creating FHA loans was to generate more homeowners by providing more affordable insurance for these buyers who otherwise couldn’t qualify for it (or put down twenty percent at closing).

FHA was very successful in improving the mortgage and housing markets, and it continues to be a popular loan option for home buyers. Since it was created in 1934, FHA and its counterparts have insured more than 34 million home loans. And, the good news for tax payers is that the Federal Housing Administration operates solely from the income it produces, meaning that it is fully self-funded. In fact, it’s the only government agency that can boast such independence.

So, who benefits from FHA loans, and when is it a good idea to consider these kinds of loans? These loans are ideal for home buyers who need a low down payment loan. Most conventional loans require that the borrower put down at least five percent at closing. FHA loans, though, only require a three percent down payment. And, the down payment is not the only benefit of FHA. The monthly payment for FHA loans is also lower compared to traditional loans because the mortgage insurance premium is less. Borrowers using FHA loans do have to meet certain guidelines in order to get these loans, but they’re not so strict. We’ve worked with a lot of buyers who have gotten FHA loans, so a lot of buyers do meet these guidelines.

If you’re looking for a lower down payment loan, be sure to ask your lender about FHA loans. He or she should be able to answer any questions you have about them and also be able to tell you whether this is the best loan for your personal financing situation. They’re certainly worth considering if you have limited funds for a down payment, and these loans are expected to continue their popularity among home buyers in coming years.

Bad Credit FHA Home Loan – Poor Credit FHA Loans For You!

Posted on by
Reply



Every person that has ever made a purchase has at some point become aware of their credit score. For most of us, our credit starts out excellent and then we rack up some unnecessary debt and before we know it, we’re in over our heads. Our credit score is what any financial institution looks at to decide whether or not they are going to loan us money. When it comes to getting a loan for something huge like a home, having bad credit can make things tough. There are some financial institutions, however, that are willing to give a Bad Credit FHA Home Loan.

Obtaining one of these Poor Credit FHA Loans is a great option for people that have been denied a more traditional loan.

Traditional loans often offer lower interest rates and lower fees at closing time, but a Bad Credit FHA Loan can be just what some people need to get their credit history turned around. When credit scores go down, even if it is for something very small, it takes a long time to get them back up.

There are some very responsible people out there that just made a few small mistakes. Getting an FHA loan can really help them reestablish a solid credit score.

Many banks offer loans through the FHA program which is a program that is funded by the government.

The loan process is very similar to that of a traditional loan, but as stated above, there are usually a few extra fees that are attached to the Bad Credit FHA Home Loan. You can think of these fees as some sort of penalty, and they often appear to be just that. The fees are well worth it, however, because for many people with bad credit, this is their only option.

The advantages of a Bad Credit FHA Loan far out weigh the disadvantages. You only need 3.5% down payment, traditional conventional home loans require 20% down payment. Your credit scores can be much lower and you still can qualify for poor credit FHA loans. FHA interest rates are competitive if not lower than most conventional loans.

Reestablishing a good credit score can help in so many aspects of your life. That is why getting a Bad Credit FHA Home Loan is a worthwhile endeavor. Not only will it help you reach your goals of becoming a homeowner, but it will help you quickly raise your credit score so that someday you can take advantage of the more traditional offers that are available.

Poor Credit FHA loans are one of the best ways to buy a home if you have less than perfect credit scores. You can get still live the American dream of owning your own home. Now is the time to do your research and see if you can get a Bad Credit FHA Home Loan!

Financing Tips For FHA Home Loans

Posted on by
Reply



Financing a new home or refinancing your current mortgage can be a daunting task. With subprime loans nearly become extinct, FHA has inspired a new group of homebuyers who look to seize the opportunity of declining home prices combined with affordable interest rates. Finding a lender who provides good advice and competitive interest rates for mortgage loans that meet your needs can be a difficult experience. Sure getting a quick rate quote online can be fast and convenient, but contracting the service of a good FHA mortgage lender may take some proper planning and preparation.

Shopping for a home loan online can be done at work or in the convenience of your own house, but you have to ask yourself… “How do I know this lender is legit?” Evaluating loan quotes from most FHA lenders should provide you with some peace of mind because HUD requires that each FHA lender have a commercial location and the requirements for bonding is more significant than it has been for mortgage brokers in the last few years.

Remember the following mortgage basics when considering home refinancing or financing with a government loan. FHA requires mortgage insurance of 1.5% of the loan amount, but its tax deductible and you only need to come up with 3% down for purchasing. FHA allows a wide range of credit so if you had a past bankruptcy or late payments years ago, you’ll likely still qualify. FHA mortgage rates are very low in 2008 and they promote responsible lending with fixed rate loans. FHA does not allow pre-payment charges, so you will not be charged high cost penalties if you want to refinance or decide to move. Last but not least always review the loan disclosures and negotiate with the “Good Faith Estimate.”