Monthly Archives: January 2013

FHA Loan Mortgage Refinance – Refinancing Your FHA Mortgage Can Be Easy!

With the economy in the state that it is in these days so many families are struggling that some people wonder where their house payments are going to come from. Families struggle to make ends meet each and every month. Some have looked into the Presidents new program called the “Making Home Affordable Plan” program. If you have not heard of this program it is offered by Fannie Mae and Freddie Mac Mortgage customers.

128019437If you are not sure if your home mortgage is with either of these companies or is an FHA Home Loan than call your mortgage lender and they can tell you. There is a program to lower payments for FHA Mortgage home owners this program is called the “FHA Loan Mortgage Refinance Program”.

If you are one of many home mortgage holders who is struggling with lower pay each month in your pocket while the cost of living has not gone down but up. Looking into a FHA Loan Mortgage Refinance will help you to lower your mortgage payments while giving you a bit of money to set aside for later. There are advantages for looking into a FHA Loan Mortgage Refinance if you did not qualify before chances are that you will qualify now.

Other advantages are that you will save yourself more money in the long run and not get foreclosed on if you can still make your monthly payments now and just get a FHA Loan Mortgage Refinance for your home loan. Look over all of the pros and cons of this program with your home mortgage lender and discuss with them how you can benefit from a FHA Loan Mortgage Refinance on your home.

Special refinancing is offered to FHA home mortgage holders with the Home For Homeowners plan incentives. This plan makes refinancing possible to those who previously were denied a refinance. Falling home prices have disqualified a lot of people for refinancing they really needed. As home values fell, so have levels of home equity. If they dropped below 20% home equity, home owners were unable to refinance in the traditional way.

This is where the FHA Loan Mortgage Refinance program and Home For Homeowners plan incentives have made getting a FHA Home refinance possible for so many home owners so that they can make day to day and month to month regular expenses for their families. Getting your own home refinanced is possible and much easier these days than it was even a few years back.

As you have learn if you are struggling to make your mortgage payment and it is a FHA loan, you need to look at The FHA Loan Mortgage Refinance Program. It could not only save you money on your mortgage payment but it could save your home from foreclosure.

The Differences Between Home Loan Modification and FHA Loan Refinance

The number of American homeowners struggling to meet their monthly payments as a result of the current recession is massively increasing. If you are one of these homeowners under huge amounts of stress as a result of such financial difficulties, this article will help you to figure out what you can do to ensure your mortgage is covered. It will provide you with the appropriate knowledge about both home loan modification and FHA refinance.

127022578Two options available to borrowers who are struggling with monthly repayments above what they can realistically afford are FHA refinance and home loan modification. Deciding which of these might suit your situation will largely depend on which insurer backs your loan. The way to find out is to ask your creditor. The main three insurers backing these types of loans are Freddie Mac, Fannie Mae and the Federal Housing Administration (FHA). These three institutions have been authorised by Congress to offer full home loan coverage, in turn exposing lenders to less bad debt and ensuring the lender gets competitive rates.

FHA loans and loans insured by Freddie Mac or Fannie Mac are not hugely different. However, the insurer covering your loan does factor in the options available to your when it comes to restructuring your repayments to make them more affordable. President Barack Obama’s is currently running a Making Home Affordable mortgage loan modification program and this scheme works alongside loans that are covered by Freddie Mac or Fannie Mae. For those in receipt of FHA covered loans, there is the Hope for Homeowners plan, which allows refinancing of such a loan to maximise its affordability.

‘Refinance’ sometimes immediately sounds alarm bells for some people as many have previously been told that they are ineligible for refinancing. However, a great number of these people who were informed that they do not qualify for such refinancing previously are not finding themselves eligible under the Hope for Homeowners scheme. Such disqualification in the first place was owed to the current climate and subsequent drop in house prices. Once property values dropped below 20% of equity, refinancing in its traditional sense was no longer an option.

The making Home Affordable plan incorporates a means of loan modification to reduce the monthly repayment a borrow makes. Incentives associated with the plan include payments to both borrowers and lenders to encourage the acceptance of more such applications and simultaneously promoting stability in the economy. For those loans insured by the FHA, the Making Home Affordable scheme is not an option. However, loan modification is available through other means and, in fact, loans backed by the FHA are modifiable with fewer restrictions.

FHA Loan Restriction

From all the available home financing loans available in the market today, the easiest one to comply all the requirements with is the FHA loan restriction. These loans are insured by the Federal Housing Administration of FHA to help most Americans that belong to the lower income brackets who cannot qualify for conventional home loans. Now, because of the current credit crunch, the FHA had announced a lot of changes that would really help millions of Americans had been badly hit by the housing crisis and the worst recession this country had seen in the past few decades.

127013484One good thing on the FHA loan requirement for income is that they don’t require you to have a minimum income for obtaining a loan. But it is important to keep in mind that you must be able to prove that you have a steady and stable source of income for the past three years.

Some of the allowable income sources that you can determine would be Social Security income, retirement pension payments, child support and even unemployment compensation! It could also come from a part-time job or from quarterly or yearly bonuses that you receive as long as it is sufficient and are steady.

They will also require you to present your billing statements, whether on utilities like electricity or credit cards, so it is a must that you had been able to pay these bills on time.

In terms of FHA loan restriction on debt to income restrictions, they will allow you to use not more than 29% of your total income in paying your loan at the total of 41% on housing loan payments including other debts that you may have. This is quite liberal compared to what conventional loans would require you. It only allows you a maximum of 28% on housing and a total of 36% including your other debt.

The down payment specified by the FHA loan requirement is also very lax. As of January 1, 2009, FHA had only imposed at least 3.5% of the total loan amount for down payment! This way beyond what conventional loans would ask you to shell out. Because most of these loans are uninsured, they require paying at least 10% of the total loan amount.

Aside from that, credit score requirements are lot more flexible in FHA loan restriction than that of conventional loan restrictions. Some states require borrowers of FHA loans to have at least 580 whereas conventional loans requires you a credit score of 720. Some private lenders can even grant you an FHA loan even without a credit history. They even offer you flexible payment options. Just ask your lending officer for details on this.

What’s even great is that even if you had bad credit history, they can still allow you to re-establish access to credit if a bankruptcy or tax liens have been paid in a span of two years or if the borrower had made arrangements on how to pay the debts.

1st Home Buyer Points to Know for 2012 FHA Regulations

It’s a new year and having a clean slate for a fresh start is the perfect recipe for any FHA 1st time home buyer looking to get their feet wet. For those browsing over the homes for sale in their local newspaper or online, it’s important to be up to date on all things FHA. With the arrival of 2012, FHA loan program regulations are out and active in the industry. First home buyers looking to receive a FHA Orange County, FHA Los Angeles, or FHA Ventura County loan should take some time to check up on the new policy changes for FHA loans.

Such changes involve the cost of FHA loans, but also include how to apply and receive approval for an FHA loan. To help, here are some of the changes for any 1st home buyer to note in the FHA loan requirements for 2012:FHA_620x350

• The Federal Housing Administration has posted the maximum loan limits for FHA loans on their website. The details shown read the loan limits are currently in effect since October 1st, 2011, and to remain through December 31st, 2012.

• As a 1st home buyer, if you applied for an FHA loan prior to the 2012 calendar year and after October 1st, 2011, there may be additional details for you to read and know regarding FHA loan limits that do or do not apply.

• Within the Department of Housing and Urban Development’s Mortgagee Letter 2011-39, regarding Forward Mortgages (new purchase of FHA home loans) approved and issued between November 18th, 2011 through December 31st, 2011, states for loan limits as: “ The Forward loan limits (floor, ceiling and county loan limits) that were in effect from January 1, 2011 through September 30, 2011, as announced in ML 10-40, shall apply for case numbers assigned from November 18, 2011 through December 31, 2011.” Meanings loan limit that were in effect through September 30, 2011, will apply for loans issued between November 18, to December 31, 2011, and as a FHA borrower, you will want to know the difference in loan ceiling limits for those dates versus what is applied for loans given today.

• The letter also states that for all loans approved and issued between January 1st, 2012 through December 31st, 2012, that: “The FHA Floor and Ceiling loan limits will remain the same as those that were in effect from January 1, 2011 through September 30, 2011, as announced in ML 10-40. The individual county loan limits contained in Attachments I and II of this Mortgagee Letter will be in effect.” Meaning, the loans issued during these dates will include the same loan ceiling amounts as stated above as well as the loan limits applied within the county of issue.

Though the 2012 FHA loan limits and regulations are still in need of official announcement, as an 1st home buyer looking for an FHA loan program, it is only positive knowledge to get and stayed in formed across all options available to you by the Federal Housing Administration.

How to Go About a FHA Loan Modification Program?

FHA loans are one of the most pursued and ideal lending alternatives as they require just minimum details that have to be met with compared to other lending programs. If you are one of those many victims who have been trying to break their head trying to figure out how you will pay up your mortgage or loan repayment, the best alternative is to settle for a loan modification solution. Even though loan modification is not as simple as it seems, it is extremely beneficial if you receive such a loan modification that will help to reduce your monthly payments and the burden that you face.

127013186Actually very few people are aware of the alternatives that are available and finding out the accurate details can go a long way in helping to unburden a lot of your troubles that you face repaying the loan. Hence it is vital for you to discover as much as you can about FHA loans which are the most sought out loans today and see if they will suit you or not. The biggest attraction of FHA loans is that they have fixed interest rates that are much lower compared to other loan options. These loans have very flexible qualification norms that are extremely profitable in the long run.

FHA loans require that a person who applies for this loan should be able to verify that they have been having a sound employment since a couple of years. This becomes all the more better if the applicant has been in the same company and can prove that they have a sound financial income that is hiked up periodically. The main criterion that has to be met by an FHA loan is a minimum down payment of around 3.5%.

Given below are some helpful guidelines that will help to become eligible for the FHA Home Loan Modification Program.

Initially you have to have a thorough understanding of all the FHA guidelines that have been prepared by the agency. The next step is to draft a hardship letter stating your problems to the lender. Make sure that this comprises of all the steps you have adopted to make your financial situation better and convince the lender that you will make your future payments at the right time. You then require drafting a financial statement which has all the details about your present position.

You have to then prepare a file of documents in accordance to the FHA loan modification guidelines including your employment records, credit history and the like. This has to be given to the bank to become eligible for home mortgage. The most important thing to keep in mind is that all the information that you finally provide the lender with is complete as an incomplete letter has every chance of getting rejected.

Make sure that you enquire form time to time about your options and what your chances of receiving the loan are. An FHA loan modification program if approved can really take a big burden off your shoulders and make your life much easier.

The FHA Loan: Fact Vs Fiction

“FHA-insured Loans are Impossible to get if you have Bad Credit” FICTION.

Although the FHA lending standards have gotten more strict since 2008, it’s still possible to get a loan after short sale or buy a house after foreclosure using an FHA loan.

“FHA-insured Loans are for Poor People.” FACT.

126994725Of course, this all depends on how you define “poor,” but the mission statement of the FHA is to serve borrowers who have “poor credit and little money for down payments.”

“You can’t get foreclosed on if you get an FHA-insured Loan.” FICTION.

Although the interest rate for FHA loans is lower (usually around 3.5%) and the terms tend to be more fair towards the borrower…it is just as easy to default and go into foreclosure on an FHA loan as it is on a regular loan. In fact, more FHA loans went into foreclosure last year than any other year in American history.

“FHA-insured loans are getting More Expensive.” FACT.

The FHA just increased their fees from 1.75% of the total house price to 2.2% of the total house price. This is in addition to your interest rate. This still makes FHA loans the cheapest in the country but it is a powerful warning sign to home buyers….buy now, because the FHA rates won’t be this low forever.

“You can’t buy a foreclosed house with an FHA-insured Loan.” FICTION.

This used to be true, but as of January, 2010, the FHA removed hurdles for home buyers when buying foreclosed homes.

“You need a credit score of at least 620 to get an FHA-insured loan.” FICTION.

The FHA is designed to assist borrowers who have been through a legitimate economic hardship and can prove it. They usually give out a large amount of loans to borrowers with a FICO score of less than 620, and who can only afford small down payments.

“In order to get an FHA-insured loan you need a Loan Officer.” FACT.

Most loan officers are not authorized to work with FHA loans. You will need to find an agency that is accredited, and has knowledge of the underwriting department at the FHA. This is because the crucial factor in getting an FHA loan is the letter of economic hardship. This justifies you getting the loan in the first place. If the letter is not written in a certain way, by a professional, you will not be accepted.

“FHA-insured loans don’t penalize people with bad credit.” FICTION.

Although it’s true that if you have bad credit, your interest rate won’t go up, If your FICO score is below 580, you will have to pay a down payment of 10% as opposed to the regular 3.5%.

“You can’t buy a nice house with an FHA-insured loan. FICTION.

The FHA limit is a total of $729,750. This includes all fees and closing costs, including your local city’s mortgage taxes.

“You can’t just buy a house with an FHA-insured loan and sell it for a profit to someone getting a regular loan.” FICTION.

The FHA officially waived the no-flipping rule in February, 2011. Once you buy the house, it’s officially yours and you can do whatever you want with it: Sell it for a profit, or keep it for yourself. The only thing you can’t do is sell it to a family member. This actually helps buyers because now they can swoop in and quickly buy foreclosed homes before the hawks get to them.