House flipping is back in style. Before the housing market collapse of 2009 you could make some fast money by buying a house and turning around and quickly selling it. Sometimes you had to make some improvements but often you didn't. That's because average real estate prices were rising.

Private mortgage insurance was hard to come by in the years following the housing market collapse, as issuers incurred significant losses, with several even going bankrupt. As a result, FHA loans became the primary option for low-down-payment consumers, and their volume grew by more than 355% from 2007 to 2009.

But FHA loans have also grown significantly more expensive in recent years, as the housing market has rebounded in many respects. This, in turn, has led to the resurgence of private mortgage insurance, once again a viable option, as well as a dramatic reversal in FHA-loan growth, as originations actually fell by 39% from 2009 to 2015.

The Consumer Financial Protection Bureau (CFPB) has adopted a final rule giving lenders more guidance about making mortgage loans and giving consumers – especially lower income consumers – additional protection against predatory lending.

The U.S. housing market has come a long way in the last five years, when the credit crisis popped a housing bubble that had grown quite large. After hitting a low point in 2011, home sales and prices have begun to rise again.

Turn on the TV, pick up the newspaper, and you’ll soon see the latest mortgage come-ons. Teaser rates, introductory one-time offers and exhortations to “Act Now!” can overwhelm you, so let’s cut through all the lingo and simplify things into two general camps: the mortgages known as standard fare, and the more complicated products that merit closer scrutiny.

Common Mortgages

What is mortgage insurance?

Mortgage insurance is a product purchased by the home buyer designed to protect the lender from the risk involved in funding the mortgage. Private mortgage insurance essentially protects the lender in the event of a borrower defaulting on a loan and being unable to repay the debt. The insurance covers the difference between the fair market value of the home and the actual price a lender may be able to sell the property for, in case of a default on the loan. Basically, it allows lenders to recover their investment, even if the property’s worth is not enough to pay off the loan balance.
While there are several types of mortgage insurance, the types that everybody complains about are private mortgage insurance (PMI) on conventional loans and Mortgage Insurance Premiums (MIP) on Federal Housing Administration (FHA) loans. That's because homeowners paying for mortgage insurance have to pay a hefty premium for an insurance policy, and it covers the lender, not them.

Turn on late-night cable television and try not to come across a commercial with aging celebrities extolling the virtues of a reverse mortgage – I dare you.

They’re everywhere these days, as a host of lenders try to convince seniors to turn the equity in their homes into cash, while staying in their residences for the duration. It’s an appealing proposition, but complaints over high fees, the skittishness of the foreclosure-scarred housing market and an exodus from the market by a few of the bigger names in the business have many would-be customers questioning those late-night pitchmen.

If it’s time to send the kid off to college, build that mother-in-law suite you never thought you’d need or renovate the kitchen, you might need to leverage the equity in your home and explore a second mortgage, a home equity loan or a home equity line of credit (HELOC).

OK, first things first: the terminology of financing tied to a mortgage can be more than a little confusing, so let’s clear that up.

Since the financial crisis, the Federal Housing Administration’s Streamline refinance program has grown to be one of its most popular offerings.  With no closing costs or credit verification requirements, a Streamline refinance represents one of the cheapest and fastest ways for consumers  to improve the terms of their home loan.  Keep in mind, however, that the program is only open to homeowners with an existing FHA mortgage.

FHA Requirements Guide

Home ownership can be difficult to achieve in today’s market, but it remains an “American Dream” not an “Impossible Dream.” Though requirements have been tightened in the wake of the home mortgage crisis, FHA loans continue to offer a way for persons of modest means to purchase a home. This guide outlines the types of, as well as the necessary qualifications for, FHA loans.