FHA Mortgage Center.com - Best Blog Contest
By admin on April 30, 2008
I have recently entered a contest on FHA Mortgage Center.com in which they are trying to find who has the best FHA Loan blog. There is a list of the leaders and the sites that have also entered so be sure to check it out and vote mine up.
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The HUD/FHA Good Neighbor Next Door Program
By admin on April 24, 2008
The FHA and HUD have a special program called the Good Neighbor Next Door Program. This program is designed to help people from certain professions to purchase homes at a lesser cost. Some of the details of this program include:
• Professionals in the fields of teaching, law enforcement, fire fighting, paramedics, and emergency medical care can get discounts on HUD homes. As long as you work in one of these fields, you can get a great deal on homes for sale from the FHA.
• People in these professions can purchase a home from HUD/FHA for a 50% discount. These people pay half of the asking price of the home without the bidding process involved with normal buyers.
• In order to get the huge discount, the person purchasing the home must agree to live in the property for three full years before selling the property or moving.
• The property can not be used as a rental unit, as part of the agreement is owner occupancy.
• If the buyer decides to move before the three years are up, they have to pay the FHA/HUD back the amount of the original discount.
The idea behind the Good Neighbor Next Door Program from HUD is to get responsible role models to move into neighborhoods and help the areas revitalize. Usually people in these particular professions get respect from the community, and the neighborhoods they live in may become safer and more secure just because of their presence. Many neighborhoods and communities have a lack of good role models, and the Good Neighbor Next Door Program from HUD offers this valuable benefit in order to get these areas safe and secure again.
For more information on the Good Neighbor Next Door Program go to http://www.fha.gov/homes.cfm
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Funds Required to Close on a FHA Home Loan
By admin on April 17, 2008
FHA requires a down payment of 3% of the sale price be paid; and will allow this to be in the form of a gift from a family member, significant other or grant; however, it cannot be paid by the seller or lender. FHA will also allow a seller to pay up to 6% of the sale price towards closing costs and prepaids. Without any contributions from the seller, you can expect to pay approximately 2% more at closing.
Closing costs are those fees charged for services provided and can be from the lender, title/escrow company or third party vendor such as the credit reporting agency or appraiser.
You will also be required to establish an escrow (prepaids) account when you close. This usually consists of 3 months property taxes and 4 months property insurance.
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A Note on Mortgage Insurance with FHA Loans
By admin on April 10, 2008
FHA requires mortgage insurance (default insurance) on all loans except a 15 year note with 10% down payment. With the requirement of an upfront amount of 1.5% of the sale price, additionally, .50% of the loan amount is collected monthly. The upfront amount is usually financed into the loan.
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Credit Scores and FHA Mortgages
By admin on April 3, 2008
While the term “credit score” has grown in popularity over the past few years, it is a very important role in the credit approval process. There are three major companies, Experian, Equifax and Trans Union; whereas, each one provides a score based on the credit information provided. Mortgage lending uses all three companies called a tri-merge report, and the middle score is usually the one referred to when credit score is mentioned.
A middle score of 620 is the rule of thumb for receiving an AU (automated underwriter) approval; however, FHA financing allows those with lower scores and no credit to be considered for a manual approval. While lower scores or prior derogatory credit may be approved, specific documentation is required in order for a credit decision to be made. In addition, FHA will consider Chapter 7 (after 2 years) and Chapter 13 (after 1 year) bankruptcy as well as previous foreclosures (after 3 years) for approval; however, credit must have been re-established. FHA does not allow delinquency on any federal debt and requires all judgments to be paid.
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FHA Loan Program Description and Qualification
By admin on March 27, 2008
Program Description
FHA’s primary financing program is a fixed rate loan. This means the interest rate you begin with stays the same through the life of the loan, usually 30 or 15 years.
Qualification
FHA qualifying guidelines include ratios in which a house payment (principal and interest, property taxes, homeowner’s insurance and mortgage insurance) should not to exceed 31% of your gross income and house payment plus all debts (referred to as DTI) should not exceed 43% of gross income. Debts considered in the DTI ratio consist of accounts with balances, credit cards and student loans (including deferred). Small installment loans with less than 10 months remaining are not counted in the DTI. Under certain circumstances, ratios exceeding 31/43 will be considered. (i.e. automated underwriting, purchasing energy efficient home, large down payment)
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FHA Homes for Sale
By admin on March 17, 2008
Have you ever seen an advertisement for a buyer’s guide to purchasing homes that are sold by the government? The commercial or ad usually tells you that there are loads of homes, cars, and other property that is seized by the government all the time, and you can learn how to buy these properties for pennies on the dollar if you purchase their book, subscribe to their website, or pay a one time fee for an ebook.
The truth is that you do not need to pay money to find out how to purchase homes from the FHA, you only need to go to their homes for sale website at http://www.fha.gov/homes.cfm Here you will find information including:
• How to purchase a home from the FHA. The homes that the FHA are selling are foreclosures that were guaranteed by the government, and now that the mortgage loan was foreclosed on, the government owns the house and is responsible for the sale. This site also features the homes that are for sale from the Department of Veterans Affairs.
• Once you go to the site you can enter the state you are interested in purchasing a home in, and the city. Then a list will come up that shows the price of the home, square footage, number of bedrooms, number of bathrooms, and more. It will also tell you if there are any buyer incentives or broker incentives for the home.
• The FHA offers discount ts and incentives for owner-occupants. Owner-occupants are people who purchase the home as their primary residence. The FHA and VA offer their homes for sale to people who plan to occupy the home before they offer them for sale to real estate investors.
• You CAN NOT purchase homes from the government for pennies on the dollar. Sometimes there are discounts available to non-profit organizations or other government agencies that are purchasing a home from the FHA, but a normal civilian citizen will pay a reasonable price for the home, but it is usually under the appraised value of the home, which is still a good deal.
• Each home has a specific period of time in which the FHA will accept offers on that particular home. If you are interested in buying a home, you must have a broker make a bid on the home during this allotted time. The FHA accepts the highest bid for the home from a registered FHA broker.
For more information on purchasing homes from HUD, the FHA, or the VA go to http://www.fha.gov/homes.cfm
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FHASecure Program
By admin on January 23, 2008
On December 3, 2007 President Bush addressed the concerns of many homeowners facing foreclosure with the news about a government backed refinancing program called FHASecure. FHASecure is a government-insured program designed to avoid foreclosure with sub-prime loan homeowners. In three months the initiative has helped over 33,000 avoid foreclosure with the hopes of helping over 50,000.
“FHASecure is providing tens of thousands of families with a powerful incentive to obtain affordable and safe home loans,” Jackson said during his keynote address to the Office of Thrift Supervision’s National Housing Forum. “Homeowners finally have an opportunity to save their American Dream without risking their financial future, and they’re taking advantage of it everyday.”
The program was established in August of this year and provides individuals who have a history of making their payments on time in accordance with their original loan interest rates but once the rates were increased they became delinquent. These loans are becoming more of a viable option considering FHA Loans are less likely to become foreclosure cases.
For information regarding this program or any other FHA program you can visit the FHA.gov site or you may also visit the Mortgage Loan Place.com, an FHA approved lender.
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Mortgage Brokers, the FHA, and approved fees
By admin on January 2, 2008
If you are planning to get a mortgage loan through the FHA you should be aware of the fees that are allowed or not allowed by the FHA. The FHA has approved mortgage lenders and brokers that you are allowed to use if you want to get a loan through one of their programs.
Some of the rules about fees that are associated with FHA loans include:
• An FHA approved mortgage broker can be paid from the loan for the loan origination fee for this service. This fee is considered standard, and is usually included in the closing costs of the loan.
• If the broker is not FHA approved then their loan origination fee can not be paid from the proceeds of the loan.
• Not only would their services not be paid for from the loan, but you would have to pay for their services, which the FHA would then require you to repeat with an FHA approved lender or broker. This means that you will pay this fee twice if you mistakenly do not use an FHA approved lender.
• If you did pay a fee to an unapproved lender or broker, you must disclose this information to the FHA. The FHA needs to determine your eligibility for the loan based on this information.
• You must not pay higher than the market rate fee or else the extra money would be considered a referral fee which is not allowed with FHA loans and could cause you to be rejected from the loan program. Referral fees are a type of kick back and are not permitted by any party in an FHA loan.
It is important to understand the fee rules of the FHA, because if you don’t know the rules then you may go to an unapproved lender who you will have to pay a fee for helping you, and this fee may cause you to be turned down for your FHA loan. Make sure that you go to an FHA approved lender right from the start to make sure that you do not get turned down for your mortgage loan over a simple mistake. You can find a list of FHA approved lenders by going and searching for a fha lender that is the closest to you.
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FHA required home inspections
By admin on November 15, 2007
If you are planning to get an FHA secured mortgage loan to purchase a home then you will be required to have the property inspected. Many buyers make the mistake of not having a home inspected before they buy, and they get stuck with expensive problems that should have been fixed before they bought the home. Even though there is a fee for the inspection, it is well worth the piece of mind in the long run.
In order to get a home inspection you can talk to your FHA approved lender. They will be able to recommend you to a reputable approved inspector that will thoroughly go through the home and let you know if there are any areas you should be concerned with.
When you first get the inspection report look it over with your real estate agent or FHA approved lender to see if there are any real problems. If there are issues, then you can choose to ask the seller to fix the problems, take money off of the asking price to reserve for you to have the problems fixed, or look for a different home to purchase.
For more information on home inspections and FHA loans go to http://www.fha.gov/buyer/process.cfm
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