The video puts this in more visual terms, but with the exception of a few additional forms the FHA loan application process is similar to that of a conventional loan.
With new automation measures FHA loans may be originated more quickly than before. And, if you don’t prefer a face-to-face meeting, you can apply for an FHA loan via mail, telephone the Internet, or video conference.
Yes, loan origination involves costs and fees. As you’ll see in the video, when you turn in your application you’ll be required to pay a loan application fee to cover the costs of underwriting the loan. This fee pays for the home appraisal a copy of your credit report and any additional charges that may be necessary.
The application fee is generally non-refundable.
While this video simplifies things to help you remember, except for the addition of an FHA mortgage insurance premium, FHA closing costs are similar to those of a conventional loan.
As of 2013, the FHA requires a single, upfront mortgage insurance premium equal to 2.25% of the mortgage to be paid at closing (or 1.75% if you complete the HELP program).
This initial premium may be partially refunded if the loan is paid in full during the first seven years of the loan term.
After closing, you will then be responsible for an annual premium – paid monthly – if your mortgage is over 15 years or if you have a 15-year loan with an LTV greater than 90%.
RESPA stands for the Federal Real Estate Settlement Procedures Act. This video tells you about it all.
RESPA requires lenders to disclose information to potential customers throughout the mortgage process. By doing so, it protects borrowers from abuses by lending institutions.
RESPA mandates that lenders fully inform borrowers about all closing costs, lender servicing and escrow account practices and business relationships between closing service providers and other parties to the transaction.
For more information on RESPA, visit HUD.GOV or call 1-800-569-4287 for a local counseling referral.
To ensure you won’t fall victim to loan fraud, as you’ll see in this video, be sure to follow all of these steps as you apply for a loan:
And do not provide false supporting documents.
There are some great tips in this video. Choose your lender carefully. Look for financial stability and a reputation for customer satisfaction.
Be sure to choose a company that gives helpful advice and that makes you feel comfortable.
A lender that has the authority to approve and process your loan locally is preferable since it will be easier for you to monitor the status of your application and ask questions. Plus, it’s beneficial when the lender knows home values and conditions in the local area.
Do your research, and ask family and friends.
Once you’ve supplied the 6 required piece of information and included any other information the lender deemed necessary, you’ll receive a Loan Estimate within 3 business days.
Once all the information has been verified IF the loan is approved the lender will provide a Closing Disclosure to you three business days before loan consummation. T
hey’ll usually set a date for loan consummation – which may also be at your closing meeting.
Closing is basically transferring ownership of the property; consummation is commmitting to the loan itself.
Once both are completed, you should be planning your move-in.
The video puts this in more visual terms, but basically, contact the local Chamber of Commerce for promotional literature or talk to your real estate agent about welcome kits, maps, and other information.
You can get information about school systems by contacting the city or county school board or the local schools.
You may also want to visit the local library. It can be an excellent source for information on local events and resources and the librarians will probably be able to answer many of the questions you have.
Like the video shows, your home should fit the way you live, with spaces and features that appeal to the whole family.
Before you begin looking at homes make a list of your priorities – things like location and size.
Establish a set of minimum requirements and a ‘wish list.” Minimum requirements are things that a house must have for you to consider it while a “wish list” covers things that you’d like to have but that aren’t essential.