Ask MetaFilter questions tagged with fha

Is she on the hook for delaying the closing?

WyoWhy — Thu, 12 Nov 2009 17:45:10 -0800

Our daughter was set to close on her first house tomorrow and to move in to her new home this weekend. Today at 4 PM, her real estate agent called. The seller (the bank, the house is a foreclosure) will not sell and/or FHA won't finance because some flashing around the roof has started leaking and perhaps has damaged some drywall in the house.

Our daughter is too upset now to even discuss it. All she's saying is that she will have to hire the workers, arrange for the real estate agent to let them into the house, and pay to fix the roof and the drywall before she can close.

She also is certain that she is obligated to pay $100 per day until she can get that done, get the house inspected and reappraised, and close. Because it's raining cats and dogs around here, she can't get the roof repaired for a few days---not to mention the drywall. And then she'll have to keep paying $100 per day until a new closing can be scheduled. Yikes!

Her house-to-be is in Virginia (Alexandria), and I haven't read the contracts she's signed with FHA and the owner. She is insisting that she's on the hook for everything, all the repairs, and $100 per day no matter what and she's completely freaked out. She's crying too much right now to be of much use informationwise.

Does her interpretation of this situation sound right to anyone? It sounds weird to me that she could be fined for delaying the closing, but I really don't know much about this kind of thing or how standard contracts read.

Any advice?

FHA Loan - MMI and 78% equity question

mjger — Sun, 30 Aug 2009 09:52:57 -0800

FHA - Do I need to pay MMI on an FHA backed loan when starting out with 78% LTV? I read here that "If you pay an upfront mortgage insurance premium, the annual premium stays in place until the loan-to-value of your mortgage reaches 78 percent of the initial sales price or the appraised value of your home, whichever was lower. The premiums must be paid for at least five years."

What if I start out with 78% LTV (I put 22% down), then do I even have to pay MMI? I only qualify for an FHA loan (see below) and would like to avoid MMI if possible.

For those wondering why I am putting so much down on an FHA loan, it is because of this little gem. I owned a home and had to move for a new job. I am renting out my old home but want to buy a home where I moved to. My rental income from my old home cannot be used as part of the qualification unless I have 30% equity for a conventional loan and 25% equity for an FHA backed loan. FHA allows rental income to be considered regardless of equity in the rental home if the person had to move for work. I have about 12% equity (thanks to the housing collapse, but at least I am not underwater) so I don't qualify using the 30%/25% rule, but I do qualify using the FHA "move for work" exception.

Your expertise in all areas is always greatly appreciated.

Buying a house with 5% down: FHA vs. Conventional with 95% LTV?

unclezeb — Wed, 26 Aug 2009 13:58:11 -0800

House Mortgage-filter: FHA vs. Conventional 95% (LTV) Mortgage? Found a calculator, but it's limited and we're seeking hive mind wisdom instead. We (me an Aunt Zeb) and several friends are separately considering buying homes in the California Bay Area, but we all need help deciding between a FHA mortgage and a conventional mortgage with 95% Loan to value (LTV). We've used the calculator, but it won't allow calculations for houses over $249,900. Our friends are looking in the range of $300k-400k houses.

Using some the following numbers as assumptions, please help compare the Conventional 95% LTV vs. the FHA mortgage:

House price: $350,000
Down-payment: $17,500 (5%)

Interest rate: 5.250% conventional vs. 5.375% FHA

FHA funding fee: 1.75% of the loan amount, can be financed ($6125) onto the mortgage. No such fee for a conventional loan.

Insurance:
FHA 0.5 - 0.55% / month (~$150) (FHA insurance cost) - required for 5 years.
vs.
0.9 - 1.9%/month (~$210) (private mortgage insurance) - may be terminated after 1-2 years.

Initial equity: +$XXXX(?) for the conventional loan?

Big question: Which is the right loan for us / our friends in that hypothetical scenario?

It seems the difference would be a slightly higher monthly payment for a conventional loan while paying PMI (about 2 years), then it would be less than the FHA loan monthly cost. After 5 years of the FHA insurance the two would be about even with a slight edge for the conventional loan. So, assuming they plan to own the house for 10+ years, which is the right loan for them? Are we missing anything that will have an impact on these figures

(Side question: I've heard an FHA loan may be "transferable" if the house is later sold to an FHA loan qualifying buyer ... can someone explain? And why/if this is not an option for a seller holding a conventional loan?)

Are FHA loans ok for older homes?

donnagirl — Tue, 19 May 2009 18:24:54 -0800

I'm selling my home. I have an offer on the table, but my realtor seems a little cautious about it because it's an FHA loan. Should I be concerned about accepting the offer since my home is older? I have a more-or-less 80 year old home that I've done a decent amount of work on. The current offer is very solid, with the exception of FHA financing. My realtor is concerned about older homes having trouble meeting FHA approval these days. If you've recently sold/bought an older home with an FHA loan, I'd be particularly interested in hearing your advice.

Do I have a chance with this mortgage?

fogster — Mon, 12 Jan 2009 18:00:30 -0800

I applied for a mortgage. What have I done? (And what should I do?) I'm fresh (well, since May) out of college, and have been looking for a place to live. Against my better judgment, I let my mom coax me into using my bank's "instant pre-approval" mortgage application to see if I could get an FHA loan to buy a condo, which would be cheaper than an apartment. "Instant pre-approval" turns out to mean, "We'll send you a letter in a week asking questions," and I, in turn, have a lot of questions for the hive mind.

With what I'm making, I figure I can afford about $2,000 a month for rent after all my other expenses, though I'm hoping for something closer to $1,250 a month, which puts me around $200,000 (ballpark) for a condo. I've found several places in the $150,000 range that still manage to be nice enough.

The past couple years I was working part-time in college, and made between $6,000 and $9,000 a year. I've since graduated and now have about $20,000 in student loans; this is a $200/month payment, and I intend to get ahead on payments once I get settled. (For now, I'm socking away as much as I can...)

I now have a letter from my bank stating that I need to provide them with a recent pay stub, past W2s, and an explanation for the gap in employment. ("Finishing college and finding a real job.") They also sent me a letter with my credit score; I don't have it on hand, but it was somewhere around 700. I'm meticulous about paying things off, having never carried a balance on my credit card and so forth, but I do have the $20,000 student loan, and am pretty new to having a credit card or anything of the sort, so I have a short credit history.

My parents have excellent credit and have said they'd be willing to cosign, but what I've read is that this really wouldn't help me that much if my parents weren't going to live there with me.

I'm spooked by something, though: the credit score mentioned that the number of recent inquiries/applications was hurting my credit score. I applied for an auto loan and was denied a couple years ago. So I'm worried that having applied for this loan is going to hurt me further. Thus my question is twofold:

- Are my chances of being approved for mortgage, "Slim but worth trying" or "Don't even waste your time" slim? Besides the fact that my credit report and history are quite unfavorable, banks aren't at their most eager to hand out money right now...

- Can I back out of this inquiry with a "Nevermind, I don't want your loan" before it's done and keep it from showing up on my credit rating? I was under the impression that it would be a quick thumbs-up or thumbs-down when I did it online, but it's actually a grueling mortgage application. If I don't/can't back out, and I'm presumably denied, how badly is this going to hurt my credit?

Sorry if this is something that's plainly obvious to most people, but I'm new to this whole thing and worried about doing more damage.

Student Loans and FHA Debt to Income Ratio

Dr. Zira — Wed, 27 Feb 2008 11:35:13 -0800

Does a student loan in deferment count as debt for the purposes of figuring debt to income ratios in an FHA loan? We're looking at applying for an FHA home loan. I had a lender tell me that my student loans, currently in deferment until graduation in May, then in grace period for six months after that, would be counted against my debt to income ratio now.
The lender says that in order to not have them counted against my debt to income ratio right now, I would have to provide documentation from the student loan lender that they would be deferred from one year of closing date of the mortgage. At best, I think I could only document the current deferment and subsequent grace period (six months after I graduate). As to applying for a forbearance, I don't think I can apply for that until I'm actually in repayment and even at that most lenders, apparently, only grant forbearances for 6 months at a time. It seems weird to count this as debt now, especially since my future income from my full time job which will kick in the future won't be counted.

Is this one-year deferment doc requirement a lender-specific thing or a HUD thing?
Anybody have experience doing this?

FHA Energy Efficient Programs

jazzkat11 — Thu, 01 Apr 2004 18:55:03 -0800

Has anyone had experience with the energy efficient program for FHA mortgage loans?