Unreasonable Requirements

In the past year FHA has made several changes, some of which borrowers thought were too strict. Lenders are now getting rules that are more strict as well, so it applies to everyone. You are probably wondering what makes or breaks a lender in the process of qualifying to do FHA loans, and so I will share a little bit of that information with you, and the reason why things are changing.




The FHA, or Federal Housing Administration doesn’t loan money, but they do insure loans for banks and lenders. Lenders and banks have always had to show that they have a strong and reasonable force behind them financially to do FHA loans. HUD is now asking lenders and banks to reimburse them for loans that were not done according to the agency’s guidelines. Sound odd? Not really, and it isn’t in force yet, but if an agency is insuring loans for that lender they should be doing things right. Insuring loans is risky, and means that if the borrower defaults on the loan then the FHA covers it. So, it makes sense that they would want to take every step possible to ensure that the loans are being done properly.



All in all, this may be part of the reason that the FHA took steps in January of this year to write new regulations and standards regarding their requirements, along with increases in mortgage insurance. The FHA simply needed to find a way to strengthen its insurance fund, and prepare to insure more loans. The FHA loan programs have been booming as a result of a bad economy, in which families were able to buy with less money down than they would have been required to come up with if doing a conventional loan. The major uncertainty was only in the fact that once someone bought a home could they maintain the payments and upkeep? This is the question that FHA is asking to ensure that lenders are calculating debt-to-income ratios properly meaning that families are able to afford the monthly payments after all other bills have been accounted for.



In the past, banks were letting families buy homes with a debt-to-income ratio of 50% or higher. This doesn’t even sound right when we already know that these families have hardly any disposable income left at all. When families have little left over, and they have to choose between feeding the children and paying the mortgage, then they are naturally going to feed the children. Tight monthly budgets have triggered defaults, and therefore this includes even FHA loans too. The FHA wants to make sure that the lenders are following their guidelines, and not just passing deals through to get them done. This will be a huge benefit to everyone.



To find out more about getting your FHA loan today, you can go to www.fhaloansnow.net. You are welcome to use my FHA calculator there to see what fits into your monthly budget before you spend.

-Mayer Dallal

Loving the FHA Calculator

I love the FHA calculator because it’s such a useful tool to help people know where they stand. People are going out trying to find ways to spend money they don’t have, and they shouldn’t. The use of the FHA calculator keeps it simple, and puts everything in perspective before you get carried away.




It is never too early to figure out how much you can afford, and the best part is it’s so easy to do with the FHA calculator. This is why I have them on my website, and encourage everyone to use them. You can plug in the loan amount, so if you have a particular house in mind then go with that. This way, you will know if what you are looking at is in your range. In addition, you can just plug in the interest rate and term, and it will give you the monthly payment with principal and interest, and with taxes and insurance.



The FHA calculator gives you real expectations on what you can afford, and that way when you search for a house, you will know what is in your budget and what isn’t. It’s all a matter of knowing what you can pay for, and if you don’t have any idea than you are in for a rude awakening. Go to your loan officer with confidence and knowledge that you have an understanding of what you can spend. For more information, or to view my FHA calculator on my website, you can go to www.fhaloansnow.net.

-Mayer Dallal

FHA and Bankruptcy

Having a good credit rating can affect your ability to borrow money, even when it comes to FHA. FHA has a stigma attached to it that sounds as though anyone can qualify. This isn’t true, and in fact they are looking at your credit closely, but their method is a little different.



FHA uses what is called “commonsense underwriting”, so they won’t hold your past against you completely. FHA bankruptcy rules are stringent, meaning you can’t have a bankruptcy on credit within the past two years. FHA bankruptcy guidelines state that if you have been in a chapter 13 for one year and have made on time payments then they will consider giving you a loan.



When deciding that you want to buy a home or refinance, you need an FHA expert to guide you through the process. I am an expert, and I can help. You can learn more by going to my website, www.fhaloansnow.net.



-Mayer Dallal