As we head into 2016, many mortgage lenders are limiting back-end debt-to-income (DTI) ratios for FHA loans to 45% or below. Some lenders may allow for a higher back-end debt ratio in cases where there are “compensating factors,” while others may be more strict with this particular criteria. It varies than one lender to the […]
Allowable FHA Closing Costs for Home Buyers
Do you have questions about allowable FHA closing costs in 2018, particularly the ones paid by the home buyer / borrower? If so, you’re in the right place. Below, you will find a list of closing costs that mortgage lenders are allowed to charge for FHA loans. Allowable FHA Closing Costs The Department of Housing […]
FHA Self-Employed Borrower Income Guidelines for 2016
Editor’s note: The guidelines below apply to automated underwriting using FHA TOTAL Mortgage Scorecard. HUD offers a separate set of guidelines for manual underwriting. Self-employed home buyers are eligible for FHA loans. But they have a few extra “hoops” to jump through, compared to borrowers who work for someone else. Requirements and guidelines for self-employed […]
Mortgagee (Lender) Requirements for Selecting an FHA Appraiser
The new FHA handbook took effect in September 2015 — most of it, anyway. The Single Family Housing Policy Handbook, as it is officially known, explains the requirements for mortgagees (lenders) when selecting an FHA appraiser to perform a property appraisal. Here’s an overview of those requirements. The Appraiser’s Independence The Mortgagee / mortgage lender […]
Electronic Signature Requirements for FHA Loan Applications
The new FHA handbook (formerly: Single Family Housing Policy Handbook, 4000.1) took effect in September 2015, and is now the law of the land. It offers some updated guidelines and requirements for electronic signatures on FHA loan applications. Here are some of the highlights: FHA Policy on Use of Electronic Signatures According to the new […]
Florida FHA Limits Well Above Median Home Price in Most Counties
Thinking about using an FHA loan to buy a home in Florida? Here’s some good news for you. The current 2015 FHA limits for Florida are set well above the median home price in most counties. This means that home buyers who use this government-insured mortgage program should have plenty of houses to choose from, […]
How Do I Find the True Market Value of a Home I’m Considering?
Reader question: “I’m looking at a house that I think might be overpriced. What’s the best way to know for sure? How do I find the true market value of a home I’m thinking about buying?” Let’s start off with a quick definition to make sure we’re on the same page. In real estate terms, […]
Rule of Thumb: When Does it Make Sense to Refinance a Mortgage?
When does it make sense to refinance my mortgage loan? Is there some kind of rule of thumb to go by? That depends on your reasons for refinancing. If you’re doing it primarily to save money, you can use the rule-of-thumb explained below. The basic formula is: Closing costs รท monthly savings = break even […]
How to Find the Right Mortgage Lender for Your Situation
Reader question: “I am planning to buy my first home soon. How do I find the right mortgage lender based on the kind of loan I need? What are the basic steps to finding a lender?” It partly depends on the type of loan you need. You didn’t specify. For instance, if you want to […]
Benefits of Using an FHA Loan to Buy a House
What are the benefits of using an FHA loan to buy a house? What advantages does this program offer when compared to a regular mortgage loan? Here’s an in-depth look at the benefits. The Federal Housing Administration (FHA) loan program offers two primary benefits to home buyers — a relatively small down payment, and more […]