Why FHA’s BETTER Than Conventional In Hot Markets

My wife Heejin was “on call” for weekend referrals yesterday, and she had two buyers who wanted to switch from FHA financing to 5% down conventional financing. The buyers were making offers over list price in very competitive markets, and they were convinced their offers would be stronger with conventional financing. And Heejin screamed,“NOOOOOO, DON’T […]Read More

Both VA and FHA Require Formal Condo Approvals; Alternatives

Most agents and borrowers know that condo complexes need to be “FHA approved” before a unit within the complex can be purchased with FHA financing. What many don’t know, however, is that VA has the same requirement. VA and FHA do not unfortunately maintain the same list of approved condo complexes. You can find FHA’s […]Read More

FHA Reminders: Attached PUDs, Refi’s to 96.5%; Cash-out Refi to 85%

A few quick but important reminders about FHA Financing, as we get questions often: 1. FHA financing is available for all Planned Unit Developments (PUDs) or “townhomes,” even if they are attached and in large complexes that look like condos. As long as they are not zoned as condos, they are eligible for FHA financing […]Read More

FHA Mortgage Insurance LOWER Than PMI In Many Cases; FHA = Good

FHA = Good. That is one of the primary points we make during our “Mortgage 101” Seminars. This is b/c too many Realtors labor under the myth that FHA financing is inferior to conventional financing. The myth stems from the days when FHA financing took longer to close and required clear Section I termite reports […]Read More

FHA Offers – Higher Esteem; Speed, Flexibility and “As Is”

One of the biggest takeaways from our “Mortgage 101” Seminars is to hold FHA offers in higher esteem. Here are a few reasons why: Speed: FHA Financing does not take longer than other types of financing. Skilled lenders can often close FHA loans faster than other types of loans. We have no trouble closing them in 17 days in […]Read More

BK’s & FHA Financing; 2 Years Seasoning Unless In Chapter 13

FHA requires only two years of seasoning from the date a bankruptcy is discharged. This is relatively well-known. What is not well known is that borrowers in a Chapter 13 bankruptcy do not need any seasoning to qualify for FHA financing, as long they have a one year history of timely payments to the bankruptcy […]Read More

What If Spouse Has Horrible Credit? Too Much Debt?

We frequently get husband/wife borrowers where one spouse has stellar credit and the other has awful credit. Most people know that the solution is simply to do the loan in the name of the “good-credit-spouse” only, as long as the good-credit-spouse has sufficient income to qualify on his or her own. The bad-credit-spouse can do […]Read More

Credit Score Under 700 And Less Than 20% Down – FHA’s Better Deal

We have a borrower with a 670 credit score and 5% down payment who is comparing interest rates on the web, and getting severely misled. Borrowers often do not understand how significantly low credit scores affect interest rates with conventional financing. For borrowers with less than 20% down and lower credit scores (under 700, and […]Read More

FHA Better than 80/10/10 Conventional in Tight Market

We can close almost any purchase transaction in 14 days, using our uber-systematic, assembly-line process. One major exception is 80/10/10 loans with 10% down and a 1st and 2nd mortgage. 80/10/10 loans take us 21 days to close b/c we have to get two loans approved. Hence, if a borrower is making offers in very […]Read More

The Case For FHA: Lower MI; Good for Low Credit Scores; Fast Closing

We are making the case for FHA once again now that MI is so much lower (down to 0.85% from 1.35%). FHA interest rates are much lower than conventional rates, often over 1/2 percent lower. FHA rates are especially competitive for borrowers with low credit scores. It is a myth that FHA properties need to […]Read More

FHA No Longer Finances FLIPS

FHA will no longer finance “Flips.” A “Flip” is any property that was purchased and re-sold within 90 days of the purchase date. This means the contract for 2nd purchase cannot have any dates on it that are within 90 days of the previous purchase. If a buyer goes into contract within the 90 day […]Read More

Lender Credits For Closing Costs Again – Effect on Payment?

Yesterday, we recommended Lender Credits for closing costs for borrowers who are tight on cash. We pointed out how such credits result in higher rates, but we failed to mention the effect on a mortgage payment. Our borrower yesterday had a loan of approximately $400,000. If she locked in a rate of 3.75%, with a […]Read More

FHA Not ONLY For 1st Time Buyers; Who Uses FHA Financing?

FHA Financing is not just for first time buyers. FHA financing can be used by anybody who does not currently have an FHA loan. FHA financing is best for borrowers with limited cash, tight debt ratios, and/or credit issues. FHA is the most forgiving type of financing when it comes to all of these issues. […]Read More

FHA Financing for “Fixer;” Save Cash For Repairs; Refi Later

We sometimes have buyers, with ample cash, use FHA financing to buy total “fixers” and then use their cash savings (from the smaller down payment) for improvements. Once their improvements are done, they come back to us and use their much higher appraised value to do a no-cost refinance into a conventional loan. For example, […]Read More

FHA Loans Do Not Take Longer Than Conventional

We are frequently asked by Realtors if we can close FHA loans as fast as conventional loans, and our answer is always the same: “of course.” FHA loans do not take longer to close than conventional loans if a lender has well-trained staff. It is a myth that FHA loans take longer. There are few […]Read More

FHA Properties Do Not Have To Be In Better Condition; Misconception

We continue to hear Realtors express concern about whether or not properties are in good enough condition for FHA financing (as opposed to conventional financing). This is a misconception left over from years ago when FHA properties needed to have all Section I work cleared. We address this often, but FHA financed properties do not […]Read More

FHA Appraisals – Only One Is Allowed;Value Can’t Change w/ New Lender

We had a borrower leave us for an online lender about a month ago. The online lender screwed up the loan, and the appraisal came in low (despite ample comps that supported value). The borrower came back to us with 8 days left to close escrow, and we could have closed on time but for […]Read More