After October 4, 2010 FHA financing becomes much more expensive for the borrower. If you are planning to use an FHA loan program to purchase a home or refinance your home, it’s economically prudent to move quickly to avoid the increase MIP expense.

If a property is being sold as a Short Sale it means that the loan on the property is for more money than the property can be sold for. There is a shortage of funds due the lender. Sometimes a lender will forgive this amount and sometimes it will not. If the amount is forgiven it may not be a win for the seller because they may have to show this amount “forgiven” as income in their taxes the following year. It must be shown as income because it was money that was owed by the seller through a note to buy the property, but not paid back to the lender and the IRS looks at this as money in your pocket even though you never see the money.

It is now critical that your lender is consulted first about potential closing dates for the contract in order to set expectations for everyone involved in the agreement — that means the buyer, the seller, the lender and both Realtors representing the buyer and the seller. The minimum amount of time we need to plan on to complete the loan process is at least 30 days from the initial application.

When a lender evaluates a loan application, a process called underwriting, they try to evaluate the ability and willingness of the potential borrower to repay the loan. The application the borrower fills out is sent to an underwriter, who is a real person and not a computer program. The underwriter then judges the borrowers ability to repay by reviewing the income and stability of past earnings.

The Department of Housing and Urban Development (HUD) announced Friday its plan to allow first time home buyers who qualify for the federal income tax credit to get the money advanced to pay closing costs and additional down payment.  Buyers must use an FHA approved lender, like Mortgage California, and be able to put down [...]