Posts Tagged ‘FHA loans’
When you do an FHA 203K Loan as either a purchase or a refinance, and have over 35K in renovations, either structural or not, you have to have a HUD Consultant, approved by FHA to monitor your rehab project, but more importantly, sign off on the initial general contractor bid, before the loan goes into underwriting. The HUD Consultants job, is to make sure the project is in line with HUD “minimum requirements” for FHA to insure your loan.
There is a purchase in Wash Park that I am currently doing a FHA 203K on and the buyer has currently received 3 or 4 bids. He has a $120,000 renovation. It’s the HUD Consultants responsibility to make sure the bids are in lined up with the scope of the renovations, according to minimum FHA requirements. Needless to say, the bids were all over the map with regards to price so it’s the job of the HUD Consultant to make sure the borrower is not getting ripped off, which in this case, he potentially was.
The bid for the electrical renovation was $13,000. The bid for the windows was $4000, both of which were extremely excessive, and the latter, the General Contractor chose expensive Pella brand windows, versus standard windows.
Lucky for us, the FHA Consultant on this job, who also has to be lender approved, was the General Contractor for 15 years building homes for Habitat for Humanity. He acts like “big brother” on these renovations, and will charge around $200 for the initial bid review, and around $100 each time he comes to follow up with the project before each draw request gets funded by the lender.
Think about this for a second. With all the craze in “fixing and flipping” properties, many people try to brave this on their own, and lose big in the process, due to projects going way over bid.
By for the safest renovation loan available is the FHA 203K Loan. This is why:
1. Instead of the usual 6-9 term note for private money renovation lending, you get a low interest rates for a 30 year term with a FHA 203K Loan.
2. You can refinance in 60 days with the initial lender into conventional financing, and if the equity is there, refinance out of the FHA loan, which carries mortage insurance.
3. You have “big brother” HUD consultant watching the entire project, and saving you time and money in the process.
Now you should have a better understanding the FHA Loan and why it’s the safest renovation loan to have. You may also have a better understanding of the role of the HUD Consultant and why he acts as a Big Brother.
Brian Quigley
Contact our FHA Loan Officer in Colorado TODAY to ensure your FHA Loan gets done right.
Mortgage Refinancing Loan Rate
Some may say that being able to buy and then afford a home in this market is an unreasonable goal. If you meet certain conditions you could be able to get into your first home even in this market.
Before taking this major step there are a few things you need to know. A few simple steps can make sure you are on the right track to buying your first home, even in this market.
Before you do anything else, you need to know how much you can realistically afford. Use an online mortgage calculator or speak with a licensed Real Estate Professional. Knowing before you shop is always a great idea and helps insure you are getting the best deal possible. A Real Estate Professional will know your particular market and be able to guide you through the process.
Find out what your credit score is. If there are any errors, this is the time to fix them. If your score is low, start working to clean it up. Your credit score along with your available down payment will play a role in determining what interest rate your will have for your loan. Start looking for cash too. The more that you’re able to put down on your new home, the lower the loan balance will be. This will translate into lower monthly loan payments.
If you don’t have a lot of funds available, don’t worry. There are loans available with low down payments, and even some with no down payment. Many of these will require very little cash up front from the buyer. Today buyers are able to purchase a home with as little as four percent down. Compare that to the average down payment of twenty percent 20 years ago. Here’s where your particular circumstances come into play. The down payment required depends on many factors. Look for a special loan that allows you to buy with little or no cash down. No down payment loans can be challenging to find in today’s market. Your Realtor will know what’s available and what your circumstances make you eligible for. Veterans may be able to qualify for a no down payment loan through the VA. Even if you’re not a veteran, you may be able to get a low down payment loan through FHA. These loans are very popular, especially for people buying starter homes.
You can buy a home with only 3.5% down if you can qualify for an FHA loan. That’s a very low down payment. Home buyers in high cost areas used to be unable to get FHA loans because of their relatively low maximum balances. Recent increases to more than $700,000 in some geographic areas have made them accessible to almost all first time home buyers. For first time home buyers this can be a perfect solution considering most first time buyers may not have saved up the 20% down payment. Keep in mind though that borrowers who put down less than 20% are usually required to pay PMI (Private Mortgage Insurance) again depending on the loan program so keep in mind your particular circumstances always play a part in this process.
After a few years of making mortgage payments, your equity will have grown. Once you have 20% to 22% equity in your home, you should be able to cancel your private mortgage insurance and save that money each month. Think of it as a cost of getting your foot in the door of homeownership. It’s usually easier than saving up a 20% down payment.
Putting less than 20% down also frees up that money for other purchases such as new furniture for your new home or you can save it for future payments, debt consolidation or your child’s college education.
What does all of this mean to you? Use the resources available and you can be opening the door on your new home, even in this market.
Many homes on the market today are short sales, which take a long time to buy. Another option is to buy new construction, like these San Diego new homes. Builders often help their buyers in obtaining home loans.
If you have considered applying for an FHA loan, then you should become familiar with the FHA requirements so that you know what to expect. There are plenty of good reasons to choose FHA over conventional, so whether you are a first time homebuyer, or you are wishing to refinance your current home loan, you can talk to a professional about getting approved for an FHA loan.
The FHA loan requirements make it clear, that your first step is in knowing how much you can afford when considering buying a home. For this, there is a specific calculation that compares your current gross income to your existing debts in order to provide a maximum loan amount that you can qualify for. The guidelines are such that it forces to consider what can fit into your budget rather than focusing on what the maximum is you can borrow. Whether you are purchasing a home, or refinancing your current home loan, your FHA loan will be built around having a reasonable debt to income ratio, so what you budget for is important.
The second step is getting qualified. In a sense, you will still have to qualify even for a refinance. An FHA loan is not necessarily based on credit score, but it is based on several factors. Pay history, job time, and income are all a part of what helps you to qualify. The FHA requirements want you to show that you have the ability to repay the loan. Your loan will be driven by the documentation that you can provide, such as w2′s, tax returns, insurance, and above all good pay history. Your rental history will be used as pay history when buying a home, and even utility bills will be considered as alternative credit if you have no credit.
FHA guidelines state that a loan can be done for someone who has had a chapter 7 bankruptcy. The FHA requirements state that a new loan can be done two years from the date of the discharge. Additionally, an FHA loan for the purpose of a refinance can be done to pay off a Chapter 13 bankruptcy. Again, their guidelines their guidelines are very specific. Not only does the bankruptcy have to be paid off, but the pay history must be perfect and must be given by the Bankruptcy Court Trustee.
Most anyone can apply for an FHA loan, and that includes investors or those who have rental properties. Rental income can be used as income, but the FHA requirements state that the individual needs to be able to prove that the rental income is stable. Rental properties or multi-family units can be considered as rental income, but rent from a property that is considered a second home for the borrower cannot be included in this. The documentation that FHA guidelines ask for, is the IRS schedule E from the 1040. From there, the underwriters have a specific calculation they work with to come to a determination.
For more information on FHA loans, and how you can qualify, you can visit www.fhaloansnow.net. There you will find valuable resources on FHA, the guidelines, and credit requirements.
Learn more about Fha Home Loan. Stop by Mayer Dallal’s site where you can find out all about Fha Loan and what it can do for you.
An FHA home loan for a refinance is the way to go for any borrower. You don’t have to have an FHA loan currently to get one. For many years, FHA loan refinancing was viewed as a program that was used for those who had average or less than average credit. Understanding what it takes to get an FHA loan and the process for the refinance is important.
An FHA home loan can either be done in what is called a streamline or a cash -out loan. The streamline FHA loan refinancing allows you to refinance the loan, and take some cash out if you want to pay off debt, but there are some guidelines associated with it. A refinance option will allow you to take up to 97.75%. These limits are just simply a guideline to prevent another economic crisis like what we are having now. These limits also will prevent you from going into a payment that is much larger than what you may have right now.
Any loan that is not currently an FHA home loan can certainly be refinanced to an FHA loan, so long as the borrower qualifies according to the FHA guidelines. In order to determine what your debt load is, they will look at what you owe on the home and your existing debts outside of that. It is always important to know what you can afford. Many people are always quick to take a look at the maximum that they can borrow, which is the wrong place to start. FHA loan refinancing takes a close look at the factors that tell the lender if you can afford the loan, and if you are likely to be able to pay in the future.
Consider that when your pay off from your current home loan comes in, it may include any unpaid interest calculated through the end of the month, and will include any late fees that were tacked onto your loan from the past. Escrow shortages can also account for this final payoff, so be prepared to consider how you want to refinance your loan before you start the process. Your FHA home loan will provide you with the experience of how your loan process should be handled, and will show you what you have been missing. The process of FHA loan refinancing is very different from other loans, so be prepared and know what you need up front.
If you aren’t sure what to do I can help. For more information on how to get your FHA home loan you can go to www.fhaloansnow.net. There is a lot of information and a place for you to fill out information to get a quote today.
Looking to find the best deal on Fha Home Loan, then visit www.fhaloansnow.net to find the best advice on FHA Refinance Loan for you.
I’m going to show you some tricks to save money on your utah home loan that the other lenders won’t be happy about.
The 1st Thing
Don’t give out your Social Security number or income/asset information until you KNOW what that Utah mortgage company can do for you!
Most Utah home loan companies will try to get this out of you just as soon as possible so you don’t shop around with other companies.
The lenders know that many people won’t give this to too many other lenders, so if they can get it from you upfront, the less likelihood there is of you getting multiple quotes from other companies.
DON’T do it. Make them give you their best quote first and then, if and when you decide to use that Utah mortgage company THEN you can send them the documents they need.
(If you want, you can always just tell them in person or on the phone what your income is, what your credit is, etc. Just be sure to not email or fax any official documents until you have their best quote and you have commited to using that company).
Item 2
Don’t pay for any upfront or application charges to any Utah home loan companies.
The only reason they do this is to further get you committed to using that particular Utah home loan company and to entice you not to shop around. If the lender tries to get you to pay for things upfront–even small things like pulling credit, the best thing to do is just say no and find a better lender).
The third step
Beware of third party fees being Low-Balled
Utah mortgage lenders can always decide what they will charge but NOT what other institutions such as title, escrow, inspection, and appraisal will charge.
However, a lot of times lenders will low-ball those fees to make their overall quote look more competitive than someone else’s. Just be sure to double check these fees closely!
Always make sure you are careful of any charges like taxes and insurance, etc. that appear to be really low.
Remember, when comparing mortgage offers, the best thing to do is to compare just the lender fees because nearly all of the other 3rd party charges won’t change a whole lot when you compare one Utah mortgage lender to Utah mortgage company.
To learn more about a Utah Mortgage Lenders, stop by my site where you can find out all about how to get The Best Mortgage Quote and how you can save money!
