Blog Category: FHA loans

divorced couple

Getting A Mortgage In Community Property States

What is a community property state?

In the U.S., nine states have tried to alleviate the pressure of divorce by passing community property laws.

In Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, community property laws require divorcing couples to split assets acquired during a marriage equally. Marital property includes earnings, all property bought with those earnings, and all debts accrued during the marriage.

When getting a mortgage in a Community Property State, a spouse might not be on the new mortgage but their credit report will still be pulled and their debts will be added to the debt-to-income ratios of the mortgage borrower. However, this only applies to FHA & VA mortgages taken in the above states, not on Conventional loans. Read More

Five FHA Loan Facts to Know Before You Buy A Home

brian-martucci-mortgage-fha-loan-facts

FHA, known as the Federal Housing Administration, offers a mortgage loan requiring borrowers to have mortgage insurance on the loan. The FHA loan originated during the great depression and has contributed to the growth of the housing market ever since.  Read More

Wave Bye-Bye To FHA…

Last week the House of Representatives passed a bill giving HUD the OK to increase the monthly mortgage insurance on FHA loans to 1.55% from the current .55%. Huh? This is really extreme, and to me is akin to FHA taking itself out of the market! Read More

FHA To Make Things A Bit Harder

The FHA is reeling from rising defaults in its mortgage business. By law the agency must set aside 2% cash to deal with unexpected losses. As of September 30, those reserves had dropped from almost $13 billion to just over $3.6 billion. This total represents only one-half of one percent of all outstanding single-family-home loans insured by the FHA, the first time since 1994 that it has been this low. Read More

All About FHA Loans

FHA loans are federally backed loans insured by the Federal Housing Administration. FHA loans are traditionally used by buyers who cannot come up with the larger down payments required on a Conventional loan which has a minimum down payment of 5% down on single family homes and 20% to 25% down on multi-family homes. The perception is that FHA loans are typically used more by lower to moderate income buyers, however not all buyers who use FHA are low to moderate income homebuyers.

The FHA loan program started during the Great Depression of the 1930s, when the rate of foreclosures and defaults rose sharply, and the program was intended to provide lenders with sufficient insurance to encourage them to lend. FHA does not lend the money to homebuyers, they insure the lenders that lend the money against loss.

FHA loans fell out of favor during the real estate boom of 1998-2006, as sellers did not want to be exposed to the more marginally qualified buyers that were usually attached to an FHA loan, nor did they want to hassle with the more stringent appraisal requirements of an FHA loan.

However, in a buyer’s market, FHA loans are commonly accepted in most markets, and FHA loans have become a savior for many home buyers in some eras. If it were not for the FHA loan, some real estate transactions would not occur.

FHA loans have more relaxed underwriting standards, below is a sample: Read More