Purchasing a new home is exciting.
Finding the right home for you and your family requires a great
deal of work and decision making. However, finding the right
mortgage is just as important as finding the right home.
Many Americans take advantage of FHA loans when purchasing or
refinancing a home. Our friendly Mortgage Loan Specialist can
help you to learn about the benefits of a FHA Loan.A FHA
mortgage can be an attractive option to many first-time
homebuyers, as down-payment requirements for a FHA mortgage can
be as low as 3.5 percent. However, you don’t need to be a
first-time buyer to take out a FHA mortgage.
FHA Refinancing
The FHA also allows homeowners’ to obtain a FHA Refinance. A FHA
refinance makes it possible to lower your interest rate and your
monthly payments. If you already have an FHA mortgage you may
qualify for a FHA Streamline Refinance. This allows you to lower
the rate on your present mortgage to current market rates. Other
refinancing options allow you to take out
cash from the equity in your home to pay off debt, make home
improvements on your home or for any other worthwhile purpose.
With many Americans currently facing interest rate resets, it's
hard to keep up with the mounting monthly mortgage payments.
History of the FHA
The FHA, or the Federal Housing Administration, was established
by the government to improve housing conditions for Americans.
The government established the FHA mortgage program in 1934 to
improve existing housing standards and conditions. Prior to
1934, a down payment was typically 50 percent of the home’s
price and payments were stretched out between only 1-5 years
How a FHA Mortgage Works
The FHA does not lend the money; it simply insures that the
total mortgage will be paid to the lender if the buyer defaults.
It is always the decision of the lender to decide whether or not
they will lend the money.
The FHA mortgage program tends to be more forgiving than
conventional mortgages in terms of past credit history. A
bankruptcy discharged as little as two years ago may not hinder
a homebuyer from qualifying for the FHA program.
Typically, FHA mortgages do not require more than a 3.5 percent
down payment. Unlike traditional loans, this money may also be a
gift to the homebuyer and does not need to be secured as the
homebuyer's own money.
Borrowers will also have to pay PMI (private mortgage
insurance) on the mortgage. PMI is used to ensure that the total
amount of the mortgage will be paid to the lender if the buyer
defaults. We have Mortgage Loan Specialists that are trained to
explain this requirement to you.
Closing costs on FHA loans are usually between 2-3 percent of
the total mortgage amount and are the responsibility of the
buyer. However, FHA closing costs can be financed into the total
amount of the mortgage and paid off accordingly or the seller
may pay them for you if negotiated as such in the purchase
agreement. In a refinance transaction the cost is included in
the loan or you can pay the cost out of your own pocket.
For More Information on this or any other
mortgage loan product, please call one of our Mortgage Loan
Specialists or
Apply Online
Today!
 |
