Ready To Apply for an FHA Loan?
January 27, 2023
Believe it or not, knowing what type of home loan you need is an important step. Borrowers who want to buy a condo unit, for example, will find the FHA loan process to be a bit different from the one needed to buy a manufactured home, fixer-upper, or other properties.
Those who have some experience buying homes know that is some fairly Home Loans 101-type advice. What’s not so obvious? Knowing the differences between types of home loans and their uses. For example, you don’t apply for the same type of loan to buy a suburban house as you do a fixer-upper. What kind of FHA loan is right for your specific transaction?
FHA Condo Loans
Those who want to buy condo units should know those properties should typically be located in a condo project that is on (or can be added to) a list of FHA-approved condominium projects. That said, some borrowers do NOT know there may be certain exceptions. A condo unit in an “unapproved” project MAY be approved for an FHA mortgage if it can meet the FHA criteria for approval as an exception.
FHA Manufactured Home Loans
Are you looking at buying a manufactured home? FHA loan rules may require the home to be delivered straight from the manufacturer to the lot it will be situated upon and you will be required to have the home permanently installed on an approved foundation.
FHA Construction Loans
Borrowers who don’t want existing construction may consider building a house from the ground up with an FHA One-Time Close construction loan. If this is an option you are thinking of, be sure to research the need for extra funds--money you may need more time to save.
Why? In addition to the minimum 3.5% down payment, your closing costs, and other funds set aside for the loan, consider saving an emergency reserve or contingency reserve for unexpected costs during construction.
FHA Rehab Loans
And what about those in need of an FHA 203(k) Rehabilitation Mortgage? If you are buying a fixer-upper, consider whether to apply for additional loan funds through the FHA Energy Efficient Mortgage add-on. This gives you more loan funds specifically to be used for approved energy-saving improvements to the property.
Refinancing Inherited Homes
Are you trying to refinance an inherited home? If you apply for FHA refinancing on such a home, know that the status of the property makes a big difference.
FHA loans for inherited homes include a rule which states that if you rented out the property you won’t be eligible for an FHA Cash-Out Refinance loan until you have lived in the inherited home for 12 months or more. If you did NOT rent the home out to others in this way, you may not have a prior occupancy requirement to deal with.
Ask a loan officer about any of these issues if you have questions ahead of your home loan application. Remember that state law and lender standards may also apply where these loan rules are concerned; FHA requirements are not the only rules that may apply.
------------------------------
RELATED VIDEOS:
Show Them You're Serious By Depositing Earnest Money
Homebuyers Benefit From the Work Done by Freddie Mac
Your Second Mortgage Is a Home Equity Loan
FHA Loan Articles
December 23, 2022When it comes to buying a house, saving up for a down payment can be one of the most overwhelming aspects. While down payments are one of the biggest obstacles for many in the mortgage process, it helps to understand the ins and outs of why they play such a big role.
November 30, 2022Buying and financing a home is complicated and can become overwhelming. It's important for you to stay informed, and know what your options are. So, start with the basics and read about the four different mortgage types available before approaching a lender.
November 8, 2022The fact is that repairs and renovations to your home cost a lot of money. Luckily, the FHA has an option for those with fixer-uppers on their hands. The FHA 203(k) Rehabilitation Mortgages allows borrowers to finance the funds for renovations to a home.
October 17, 2022If you’ve begun your search for a new home and are looking into mortgage options, you’ve likely heard of mobile, manufactured, and modular homes. While people working in real estate throw these terms around easily, it might be something that leaves everyday homebuyers confused.
September 17, 2022The FHA sets these limits annually according to the location and type of home, and it represents the maximum loan amount the agency will insure. Approved FHA-lenders can set their own requirements in addition to the FHA’s criteria for borrowers, such as higher credit scores.
