FHA Guidelines

What Questions Should You Ask Your Lender When Applying for a Loan?

                  When shopping for renovation loans and FHA 203k renovation loans, what questions should you ask your lender to be sure they are qualified and ensure a smooth process? Renovation loans are popular because they are flexible: you can take a property in need of a lot of work, and turn it into a good-as-new home, or find a home needing minor updates and make it the way you want. Checking Lender Experience While many lenders say they do renovation loans, it is important to find out how many they’ve actually done. One of the most important things to determine is the amount of experience your lender has with renovation loans. Renovation loans are different than traditional mortgages. Not only does the borrower need to be approved, but contractors doing the renovations need to be involved as well. Everything that needs to…

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What Can You Do with a Renovation Loan?

What specifically are you allowed to do with a renovation loan? The real question is, “What can’t you do?” because there is a lot of flexibility with this type of loan. There are many different ways to use this program. There are three basic types to look at: FHA 203k renovation loan: a great way to get a government-insured property with as little as 3.5% down, including costs of repairs Homestyle renovation loan: better if you have a bit more of a down payment VA renovation loan: includes special benefits for veterans and disabled veterans The good thing about renovation loans is their flexibility: you can use it for something that just needs a little bit of work or a home that needs a tremendous amount of work. It doesn’t matter what the condition of the property is currently in, but what the condition will be once you finish making…

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How to Find the Right Lender for a FHA 203k Renovation Loan

                  A renovation loan, or FHA 203k renovation loan, is a great tool for buying a home that needs some repairs or improvements to raise the value of the home. Renovation loans allow buyers to incorporate renovation costs into the mortgage in order to improve the home and raise its value immediately, rather than waiting to renovate years down the road. In addition, this can save money in comparison to a second mortgage or use credit cards to make improvements. When shopping for a lender, what questions do you need to ask when considering a renovation loan, or FHA 203k renovation loan? How Experienced Is the Lender? How many renovation loans has the lender done in the past? There are many moving parts to a renovation loan: you have to approve the situation, know the timing of everything, and know what is…

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How Can a 203k Renovation Loan Save You Money?

                  If you’re looking into buying a home in the Chicago area, a 203k renovation loan can end up helping you save money. If you’re looking to buy with an FHA 203k loan, it will allow you to buy a home, and add in some improvements at the same time. While it costs a bit more to buy with a 203k loan than a traditional mortgage, you can still save a lot of money if you know what you’re doing. When a Renovation Loan is Appropriate It comes down to your plans for the home after you buy. Many folks think that a renovation loan is only for buying a run-down property or a foreclosure, and homes that haven’t been cared for very well. However, there are many homes in good condition that are simply out of style, such as homes occupied…

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Are You Thinking About Buying a Chicago Area Home in 2017?

                    With 2016 behind us, and the beginning of 2017 underway, many folks take a step back and look at their New Year’s resolutions and what they would like to accomplish in the coming year. While reflecting on their aspirations for the year, many renters and first-time buyers have the goal of purchasing a new home in 2017. If buying a home is one of your New Year’s resolutions, take some time to figure out and assess where you are now, and where you need to be in order to buy a home. Doing an assessment with a qualified mortgage loan officer will help you determine where you are at financially, and things you can to do to help you prepare to buy a home. Examining Your Savings, Debt and Credit An important aspect of your financial picture is your amount…

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Simple Guide to the 203k Renovation Loan

If you’re out looking for a home, you’ve probably noticed that inventories are tight: there are not as many homes available as you would like, and the homes in good locations at the right price will go fast, often with multiple offers. Similarly, there are many homes that sit on the market for a long time due to their condition: perhaps due to the home not being updated in many years, or due to a physical problem with the home that needs to be fixed before occupancy. In these cases, a simple fix for this problem is the renovation loan. Buying the Ugly Duckling Sometimes, it makes sense to buy what many would call the ‘ugly duckling’ – a home that needs some updating or several repairs. An updated home in a good location will often be very expensive, and a discounted ‘ugly duckling’ home can be a better financial…

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5 Differences between FHA and Conventional Home Loans

There are many different types of home loans out there these days. It’s hard to figure out where to start. I’d like to save you hours of scanning the Internet by breaking down the fundamental differences between the two most common types of home loans: FHA and Conventional. 1. The Basics Let’s start with some basic information. By definition, A Federal Housing Administration (FHA) loan is government-backed, while a conventional home loan is not. This means that if you default on a conventional loan, your lender has no guarantee for repayment. If you default on an FHA loan, the FHA insures that the lender will be repaid in full. Because of the FHA home loan’s guarantee, the underwriting process may take longer and there are additional FHA requirements, such as a health and safety inspection. The wait and additional requirements can be worth it, though, if an FHA home loan…

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Should Chicago Area Home Buyers get FHA Loans?

Mortgages with low down payments, the most popular type of mortgage, keeps getting pricier and less appealing as buyers question the worth of obtaining an FHA loan. On loans backed by the Federal Housing Administration, the mortgage insurance premium has nearly tripled since 2008. Recently FHA changed the rules so that now borrowers must pay for mortgage insurance for the entire life of the loan. “FHA loans really used to be a first option for homebuyers with a low down payment,” says Scott Schange, a branch manager for Broadview Mortgage Katella in Orange County California, “Now I see people doing them because they have to and not because it’s their first option.” The Federal Housing Association allows buyers to obtain a mortgage with a down payment that can be as low as 3.5 %. The underwriting requirements to qualify for FHA loans are general less strict than that of a…

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Great News for Chicago Area FHA homebuyers – Rule to Require Payoff of Medical Collections is Overturned

FHA Guidelines Great news for any prospective Chicago area homebuyer who have more than $1,000 in medical debt. The Federal Housing Administration (FHA) is backing off from their previous plans to deny applications for those with major medical debt. The previous plan was supposed to go into effect in April, but was then put on hold until July. This plan was sure to hurt many other wise well qualified potential homebuyers, would have disqualified people with more than $1,000 in medical or other collections from getting a FHA-backed mortgage. However, the FHA rescinded the decision last week which means that those with medical debt can still qualify for a FHA loan. Understanding your credit score is important and there is definitely some good news for homebuyers in the Chicago area. A provision like the proposed one would have hurt many home buyers because medical debt is a common occurrence. Many…

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Chicago Area FHA Mortgages – Links for the Week

FHA Streamline Refinance – New Program Will Help Some Chicago Area Home Owners Save Money After June 11, the FHA will reduce mortgage fees for qualified borrowers under their Streamline Refinance Program.  The new FHA program will allow borrowers who currently have a Chicago FHA mortgage to refinance with today’s record low rates.  However, this program only applies to those borrowers who took on the mortgage before June 1st 2009. FHA May Relax Some Rules for Condos Soon The FHA may soon change requirements on financing purchases of condominium units. No specifics yet, but plenty of speculation. One possible change could come on the condo association rule, which has troubled the Chicago market.  The Community Associations Institute believes the FHA will modify its standard on assessment delinquencies to allow flexibility for associations. FHA Foreclosure Starts Rise 73% in April Overall foreclosure starts fell 2.6 percent in April, with FHA foreclosure…

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