Questions to Ask About an FHA Home Loan Before You Apply
March 16, 2023
Are you tempted to build a home instead of buying existing construction? If you want a property that is larger than one living unit, consider buying an existing construction home instead since many lenders who deal in FHA One-Time Close construction loans restrict the project size to a single unit.
If you choose to build instead of buy, you will either need land to build on or you will need to purchase land to build the home on.
If you choose to buy existing construction and decide on a multi-unit home, you’ll want to compare the costs of purchasing a duplex or townhouse compared to that of buying a two-unit property configured differently such as a two-bedroom suburban home.
Are you looking at newer homes or older ones? Assuming you want to buy existing construction with an FHA loan, older properties may have appraisal issues that newer ones do not; but older properties can be purchased with an FHA 203(k) Rehabilitation mortgage and you can repair them with loan funds.
This option eliminates the need for the home to be in “appraisal ready” condition at loan time but it does require you to make the home compliant with FHA standards and local building code as part of the rehab work and as a condition of loan approval.
And if you are buying a newer home but still want to do some improvements without applying for a rehab mortgage, you can always consider an FHA Energy-Efficient Mortgage, which adds extra loan funds specifically for installing energy efficient upgrades to the property such as storm windows and doors, energy efficient appliances, and more.
An FHA Energy Efficient Mortgage can be used with nearly any type of FHA home loan; it is also available with FHA refinance loans. You can even add this to an FHA 203(k) Rehabilitation mortgage to get more mileage out of your home loan.
Other important questions to ask yourself in the loan planning stages have to do with how affordable your loan will be. Do you need down payment help to afford your home loan? If so, begin searching your state and local government official sites for homeowner programs and down payment assistance programs.
The FHA and HUD do not offer these, but your state and local government might, in partnership with area lenders and other agencies. Down payment assistance is sometimes offered on a need basis. In other cases it may be offered to anyone who qualifies for the program as a first-time buyer or a buyer who has not owned a home in three years. Check your local state government to see what programs may be offered in your area.
------------------------------
RELATED VIDEOS:
FHA Loans Have Eligibility Requirements
The U.S. Government Backs Mortgages Through the FHA
Financed Properties Must Meet FHA Minimum Standards
FHA Loan Articles
January 30, 2025FHA residential refinance loans, insured by the Federal Housing Administration, allow homeowners to refinance their existing mortgages. They potentially have more flexible qualification requirements than conventional loans. FHA refi loans can lower monthly payments, shorten the loan term, consolidate debt, or even access cash for home improvements or other needs. Understanding the eligibility criteria and different refinance options is crucial for homeowners considering this option.
January 29, 2025Are you about to graduate from college and are already thinking of what your dream home might look like? Understanding the intricacies of the mortgage is an essential step in your journey toward home ownership. Two key terms you'll encounter early on are "FICO score" and "credit history." How do these two things affect your ability to buy a home?
January 28, 2025Are you dreaming of transforming a diamond-in-the-rough house into your ideal home? Fixer-uppers offer a unique opportunity to personalize your living space and potentially build equity at a price lower than some occupant-ready homes.
January 27, 2025When buying or selling a home, two critical processes are often confused: the appraisal and the inspection. Though both involve a thorough examination of the property, they serve distinct purposes and provide different types of information vital to a successful FHA loan transaction.
January 22, 2025Consider this scenario: you've been in your home for five years or more and you've likely built up a significant amount of equity, and now you might be wondering how to put that equity to work for you. Whether you're dreaming of a major renovation, need to consolidate debt, or want to help a child with college tuition, you have options. Two choices are an FHA cash-out refinance and a home equity line of credit (HELOC).
