Hello Lisa, no there is no pre-payment penalties on FHA loans. Depending on the city you purchased in will determine if you will realize any equity to cover the costs to sell a home.
You can buy another home with FHA as long as you are selling your home that has an FHA loan. You can only have one FHA loan at a time. Now you could rent it out and purchase another home FHA if you are increasing in family size or a job relocation.
Any agent like myself can run a CMA, comparative market analysis, to evaluate your market value to make an informed decision. Also you want to go over financing choices as well to know your options, payments, down payment, interest rates, etc.
You may qualify to buy FHA 3.5% down from a minimum 580 fico score or 3% down conventional from a minimum 620 fico score. With a little discussion and CMA you would be able to put together a game plan.
When do you plan on selling and are you staying in CA and purchasing another property or intend on renting?
Sheryl Arndt, Real Estate Broker - Sr. Loan Officer CA only
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You need to have a Realtor on your behalf to check if the HOA for the complex will allow you to go FHA or only conventional. If the complex is FHA approved or accepting wavers, then you only will need 3% of the pruchase price. (which means $3,500 per every $100K) Lets say if the listing price is $200K then you will need $$7K pluss some extra for closing costs. It the complex is not FHA approved then you will need from 5% to 20% down payment depending on your fico score.
Maribel Munoz/Dilbeck... more
If you have an itin# then you should have tax transcripts too. As long as you have tax transcripts & a "good job", then you would be eligible to apply for a loan. Getting approved for a loan though is a whole other matter. Approvals for traditional financing options these days are contingent on so many other factors besides verification of income. Other factors are assets, liabilities, employment etc.
As you may have discovered, simply having a good job is not enough to qualify for a loan. There are some lending sources that may not require tax transcripts but they will not be traditional lending options but rather more likely to be either portfolio lenders or hard money lenders. If you have any other questions and/or concerns or if I can be of any assistance, please feel free to contact me.... more
It is difficult to give a specific answer based on the limited information you provided. Hopefully, this will help.
The majority of homes sold in Arleta in the past 90 sold in the $200,000 - $400,000 range, with an average of just over $270,000. I will respond to your inquiry based on this average price, which assumes she lives in a 3 bedroom - 2 bath home of approx size 1150 s.f. If this is the case then your mother has a reasonable amount of equity in her home. I am also assuming that your mother is at least over 55 and hopefully over 62.
Options for staying in the home:
1. Refinance seems to be the majority opinion of the OTHER AGENTS on this blog. Here is why THAT MAY NOT BE POSSIBLE. Even though your mother has equity, lenders are now looking not just to equity but also the the borrower's ability to make the monthly mortgage payments. The payments must be from current income or assets, not from taking cash out of the property to cover a few years of payments. You say your mother is on a "limited income" and so, even with spreading her payments out over a new 30 year loan, she may not be able to show the ability to make the monthly payment.
2. A MORE FEASIBLE OPTION - if she qualifies - is to do a reverse mortgage. This would pay off the existing mortgage balance and leave her with NO payments for the rest of her life. This way her limited income would only have to be used for her daily care and expenses. That might even give her the option of some travel or other leisure activities which might currently be beyond her reach.
Options based on changing her living environment
1. Rent out the house. An average house in Arleta should rent for around $1500. This would cover her mortgage payment and give her about $800 per month to rent a nice, small apartment. She might qualify for senior housing or she might choose to move to a new community with a lower cost of living. No matter what she chooses, this might be an attractive change for her.
2. Sell the house and buy a smaller property for all cash. If she can clear $150,000 on a sale of her home, she could buy a 2/2 condo in Arleta. If she chooses to move to a retirement area like Palm Springs, CA or Arizona or Nevada, she could probably buy more house than she is currently living in for the $150,000 net. Or she could choose to buy less house and have a nice nest egg to pursue other interests.
As it appears your mom has a lot of options. If she wants to explore any of them in detail, please feel free to contact me through my profile or by phone. Dare to Dream.
Shel-lee Davis, CDPE, SFR, QSC
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty