Monthly Archives: December 2012

FHA Loan Mortgage Refinance – Refinance Now With a FHA Loan!

You probably have heard that now is a good time to refinance your home mortgage loan because of the lowest interest rates in decades. Refinancing a mortgage can be a good idea if you have a lot of equity in your home and need money for personal reasons. One type of refinancing is the FHA Loan Mortgage Refinance.

126978736It can be used for consolidating bills, college tuition, home improvements or even a great vacation. Qualifying is easy even if you have a low credit score or low income. Homeowners with more expensive homes or higher incomes also may qualify.

There are several types of loans available to home owners but these loans only apply to principal residences. There are several simple ways to apply. You can go to a bank or go directly to an online site to get an application and quote.

One of the things you can do if you have a high adjustable rate mortgage is get it lowered. If you need cash an FHA Loan Mortgage Refinance can mean you can get up to 95% of the value of your home. This is called Cash-Out Refinancing. This financing is available to everyone that has paid down their principle and has a significant appreciation in the value of their property.

A Cash Out is just what it sounds like, a loan so that homeowners can refinance their existing mortgage and access cash. New regulations from Congress has raised the loan limit across the country. In some places doubling the limit from $300,000 to $600,000 depending on the value of the home.

FHA Streamlined Refinance loans is another way to go. It allows you to refinance quickly with much less paperwork.

FHA Loan Mortgage Refinance is often done without new appraisals and very little credit restrictions, lower interest, no income requirements and little or no documentations. The only stipulations in this kind of loan is that you must presently have an FHA loan and be in good standing as an existing FHA loan customer.

Getting the equity out of your home to pay off credit card debt is a smart move. This could be a real saving on your tax returns. Home equity interest is usually tax deductible and credit card interest is not. Please consult your tax specialist for your situation.

Also, the interest on a home equity loan is usually lower than credit card interest. When you are rated on your credit score the companies look differently at credit card debt and home equity debt. By checking out the sites online and answering some simple questions you can get a good overall picture of the pros and cons of refinancing.

Yes, now is a good time to refinance your FHA Home Loan and an FHA Loan Mortgage Refinance could be just what you are looking for!

Basic FHA Loan (Home Mortgage Insurance – HUD/FHA)

The basic FHA loan which falls under section 203b is an effective mortgage insurance loan provided by the HUD/FHA to protect lenders against risk of default.¬†Section 203b is the basic FHA loan which is a mortgage insurance program form for single families. This housing loan is provided by the HUD’s FHA or the Federal Housing Administration to insure the mortgage loans made by the qualified private lenders to people refinancing or purchasing a primary residence.

126971813This is also commonly known as FHA One to Four Family Mortgage Insurance and it is still an important tool in the form of a government loan which is used by the federal government to a great effect to expand financial mortgage assistance to first time home buyers and other borrowers, who do not qualify for conventional loans for mortgage on affordable terms and also for those individuals who live in underprivileged areas, where it is harder to get mortgage facilities. The FHA Mutual Mortgage Insurance Fund, protect these obligations and it is maintained by borrower premiums entirely.

The basic FHA loan program is an effective tool in the hands of FHA and it is governed by HUD. It is a government loan program which provides insurance mortgage assistance to lenders against the risk of mortgage defaults from qualified or eligible buyers. The mortgage insurance can be used to finance the purchase of existing or new one to four family housing as well as to settle debts. The section 203b of the housing loan has several important benefits:

  • The requirements of down payment can be low. Unlike the conventional insurance mortgage loans, which requires frequent down payment of 5 percent or more of the total purchase price of the house, the FHA approved single family mortgages which falls under section 203b, reduces the rate of the down payment to 3.5 percent. This is simply because the insurance mortgage provided by the FHA allows borrowers of the loan to repay approximately 96.5 percent of the total value of their house or property purchase price through mortgage repayment.
  • The fees charged by the lenders in order to provide basic FHA loan assistance to the borrowers are regulated by the FHA, as the FHA impose limits on the fees. The fee charged by the lenders, which include processing and administrative cost may not exceed more than one percent of the loan amount received by the borrower.
  • The insured amount is fixed by the HUD and it depends on geographic locations.¬†

The lending institutions or agencies that provide this housing loan assistance are approved by the FHA. Thus, FHA approved banks, loan agencies and mortgage companies are authorized lenders of the basic FHA loan.

FHA Home Loan Qualifications – 7 FHA Loan Requirements You Need to Know!

When purchasing a new home, there is an important financing option to consider, the FHA loan. If you meet the FHA Home Loan Qualifications, you may be able to save a lot of money with an FHA loan.

Not everyone qualifies for one of these loans because the federal government has set some strict guidelines. The majority of people who finance with this type of loan are first time home buyers.

Here are seven FHA Home Loan Qualifications:

1269668821. One of the FHA Loan Requirements is that the home you purchase must be your place of residence. People who invest in a home to rent it out are not eligible for an FHA loan.

2. There is also a maximum loan amount that is determined by the federal government. This amount is determined by assessing the costs of the area and the price ranges.

3. In most cases, this type of loan has a loan to value ratio of 96.5% unless there is special circumstance in which a larger down payment is required.

4. Having a solid employment history is another one of the FHA Home Loan Qualifications. Whether you are an employee or are self employed, to qualify for an FHA loan you must usually maintain a job or line of work for 1-2 years. A diploma may be accepted instead of work history if the borrower is a recent graduate. Borrowers who are self employed must provide 2 years of tax returns as well as a profit and loss statement.

5. The debt to income ratio of a borrower cannot be over 41% in order to meet the FHA Home Loan Qualifications. In some cases the government may allow up to 45%, especially if the debt is due to student loans.

6. FHA also requires the borrower to pay a down payment of 3.5% of the purchase price, unless there are special circumstances that may require a larger down payment. At closing, the seller can pay up to 6% of the closing costs for the borrower.

7. Last but not least, an thorough inspection of the home is one of the very important FHA Home Loan Qualifications. The federal government has strict standards on what they consider a habitable place to live. If the house is in need of any maintenance or improvements, the seller must have them repaired prior to closing. If they refuse to make improvements, the home will most likely not qualify for an FHA loan.

FHA Housing Loans are the most popular ways of financing the purchase of home today in United States, mostly because of the low down payment and the low credit requirements. If you can meet the FHA Home Loan Qualifications then you can purchase that dream home of yours!

100 Percent Mortgage Financing – Qualifying for a FHA Loan

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

126887350FHA 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.

FHA Loan Requirements – What Are They and How Can I Benefit

FHA loans are a popular and valuable lending option because they do not have the stringent requirements that are usually seen with other lending packages. There are some differences in these loans that are based on the housing market in the region of the country where you live. This is why it is very important to find out as much information about FHA loans as possible before you determine if they are the right choice for you.

126864063Unlike subprime mortgage loans, which usually have widely varying interest rates that spike upwards in the fifth or sixth year of the term, FHA loans have fixed interest rates that, on average, are lower. Unfortunately, many home buyers are not aware of the very achievable qualifications for an FHA loans and find themselves signing up for subprime structured loans with monthly payments that soon rocket so high that repayment is almost impossible.

The more flexible qualification standards for FHA loans make them an option that could be considered by almost all buyers. Most of the traditional loans that are available for homes require borrowers to have a credit score that is 740 or higher while FHA loans can be approved even if someone has a credit score that is as low as 640.

These loans also make it possible for someone to borrow money even if they have a credit history that includes serious financial problems such as a bankruptcy or a foreclosure. FHA lending agents do insist that all borrowers must show a perfect credit history during the 2-year period following a personal bankruptcy and for a 3-year period following any previous foreclosure.

FHA loan qualifications state that an applicant must be able to show that they have at least a 2-year history of steady employment. This work history is looked at most favorably when the applicant has been with the same employer and can show that they have a stable salary with periodic increases.

One of the most significant requirements for an FHA loan is the minimum down payment of 3.5%. This money is required to secure the loan for the borrower. The anticipated monthly mortgage payments are restricted to no more than thirty one percent of the applicant’s gross monthly income. There is also mortgage insurance that must be paid when you accept one of the FHA loan packages. Some people see this as a minor negative but it enables you to take advantage of an FHA Streamline Refinance if a refinance is required in the future. The great thing about an FHA Streamline Refinance is that it can be done quickly without having to go through the lengthy more demanding qualify process needed for a conventional loan.

Applicants who are interested in finding out more should be aware that the amount they are able to borrow may be less than would be offered in a conventional lending situation. This is another consideration that will vary according to the area of the country in which you live. The US Office of Housing and Urban Development, or HUD, limits the amount a borrower can qualify for; based on the median home price in the area they anticipate living. People who live in a region where housing prices are much higher than the national average may be approved for higher FHA loans.

In this recovering real estate market, the pros associated with an FHA Home Loan appear to outweigh any cons that might surface. Please visit the links listed below to learn more about FHA loan requirements and how you might be able to benefit.