Low home prices. Historic interest rates. Tax credits. Stimulus packages. Bailouts. There's a lot of chatter about how these factors affect the real estate market, but not enough talk about a no-brainer financing option, FHA.
FHA financing seems to be a neglected talking point on the national media stage.
The loans, which require only a 3.5 percent downpayment and a decent (but not necessarily excellent) credit score, are ideal for qualified, first-time homebuyers who have low or manageable debt-to-income ratios but may not have tons of cash for a conventional-loan down payment. They aren't just for first-timers, however.
All you hear in the news are naysayers telling consumers they won't be approved for a mortgage unless they put 20 percent down and have perfect credit. But that's simply not true. Unfortunately, the popular perception is that money isn't available and you can't get it right now if you don't meet these astronomical requirements. That's why so many people aren't buying right now.
Interested?
1. First, you need a lender who has a delegated FHA underwriter (not a mortgage broker; a full-service lender). Send me an email at avsearle@gmail.com and I can get you in touch with one.
2. The borrower must meet standard FHA credit qualifications (there's no set credit score barometer, but a borrower's debt-to-income ratio is heavily considered).
3. The borrower is able to finance the upfront mortgage insurance premium into the loan. The borrower will be responsible for paying an annual premium.
4. The FHA mortgage requires a low 3.5-percent down payment, and that money can come from a variety of sources, including parent gifts and HUD downpayment assistance grants.
5. Closing costs are also low - typically 3 percent of the total purchase price - and are usually covered by the seller in today's market. They can also be incorporated into monthly payments.
6. Eligible properties are one-to-four unit structures, and each state has a purchase price limit (as high as $400,000) for FHA loans.
7. If a buyer finds a fixer-upper, the FHA 203(k) program can help the person purchase or refinance the property, with the cost of repairs and improvements included in the loan.
8. FHA home mortgages aren't just for first-time homebuyers. FHA refinance loans can help people get out of toxic debt situations caused by subprime mortgages with high interest rates.
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