Don’t Fall for These Myths About FHA Loans
The current lending environment is extremely volatile, and loan rates as well as products change significantly week to week. In order to keep up with trends, I attended a seminar on FHA financing that was put on by a reputable mortgage company that I work with (free seminars can be a valuable and cost effective way to keep educated with trends in the industry).
It’s a good time to learn about FHA. It’s projected that 48 percent of all home loans will be FHA-financed in 2008, compared to 2 percent in 2007.
As 100 percent financing options are becoming a thing of the past in the conventional financing market, FHA is becoming a more prominent financing mechanism for people buying a home.
But some of the reasons people typically cite for not wanting to use HUD financing is because they believe there are extra inspections, more paperwork, a requirement to invest 3 percent for a down payment, only available for first-time home buyers, and that all borrowers must occupy the property.
These concerns are unfounded.
First of all, HUD requires an appraisal not a special inspection. If the appraiser finds issues that
concern the possible safety or habitability of the property, then they can ask for an inspection. However, almost everyone buying a home should have a qualified ASHI inspector inspect the property.
In addition to no special inspections, there is no additional paperwork — it is simply different paperwork.
Also, buyers do not need to spend their own money on the down payment. They can receive their down payment from other sources such as gifts, grants, and seller-funded down payment programs.
The FHA loan limit in my area, St. Louis, is $281, 250, which is well above the average home price for the region, so most home buyers can use FHA financing not just first-time buyers. All borrowers do not need to occupy the residence, only one. So a buyer can in effect have a co-signer on the loan if, for example, parents want to help a child buy their first home.
Want to know the FHA loan limits in your area? Check out this HUD Web site to find FHA mortgage limits by county and state.
Howard McAuliffe is a licensed agent for Premier Realty Exclusive in St. Louis and is pursuing a master’s degree in Urban Planning and Real Estate Development at St. Louis University.
Subscribe to this blog's Web feed
Comments
This is great advice to blog about education regarding the FHA product. I have been involved in sales, ops and underwriting of the FHA product- currently the DE Underwriter for a National Mortgage Banker, Blue Saphire Investments, Inc. in CA. I offer training and am so impressed when mortgage professionals that want to survive want to learn more about their craft. I, myself, spend at Least 2 hours a day reading and researching issues regarding questions and scenarios.
Sam Gomaa, DE Underwriter
Blue Saphire Investments, Inc. Union City, CA
Posted by: Sam Gomaa | June 25, 2008 10:57 PM
Great topic Howard. We have a couple free seminars coming up for our members on this very topic. I hope it's ok with you but I mentioned your blog on my ActiveRain blog, while directing people to our upcoming seminars, I directed people here to read the full article. If you would like me to remove it please let me know and I will but I didn't think you would mind. Have a great weekend!
Posted by: Danielle | June 27, 2008 03:49 PM
There are many type of loans available in the market. Its very important to examine all your options first before settling with your final choice. Thanks for the info!
Posted by: personal loans | July 12, 2008 04:10 AM
Today's Most Popular Fha Loans
What is fha loans with bad credit ?
Fha loans are the most popular consumer mortgage loans you can possibly have today.
Also fha bad credit loans are done by the government, basically the government have created these loans years ago and it was actually very popular.
Fha bad credit loans also called fha hud loans have their fha guidelines and fha requirement.
So for you to get a consumer mortgage and an fha approval you need to know the guidelines.
1.Fha fees- fha fees are not so much different than any other conventional mortgage loans you had in the past.
The problem is that some of us that apply to have a consumer mortgage are being charged high points in conventional mortgage loans.
If you will read the fha guidelines you will understand that with fha lending it's a much safer way to go because there are some restriction with the fha fees.
2.Fha appraisal- fha appraisal is also not so different from a normal appraisal you will have to get done in a conventional mortgage.
But here the appraiser that will appraise your home will have to be fha approved to get you an fha appraisal done.
3.Fha conventional- fha conventional is not a normal term but some people are using this term for some reason.
Fha conventional is not related to one another, fha is fha and conventional is conventional.
4.Fha lenders- there are not a lot of fha lenders and fha brokers.
A lot of people think that every mortgage broker can help them with their fha Home mortgage, no.
Only a few Mortgage brokers out there are really fha approved, so before you make a decision about the next mortgage broker you will use make sure they're approved.
5.Fha loan limits- the fha loan limits have changed recently. Until march of 2008 the fha limits were up to $417,000, because of states like California, New york and Florida the fha loan limits have changed to $729,000.
The new loan limits will help many homeowners to refinance their homes and avoid foreclosure.
6.Fha pmi- fha pmi is the mortgage insurance you required to pay.
Please read the fha requirements, in conventional loans you will pay pmi only if your loan is more than 80% ltv.
Since fha programs don't offer a second loan on your mortgage they will make you pay pmi instead, which is good because paying pmi is much better then a second loan.
7.Fha rates- fha rates are much better then conventional interest rates.
Conventional banks have a higher interest rates because they charge to the index of your loan a margin. Fha interest rates have no margin since the fha program is done by the government.
Fha rates are lower then conventional rate loans.
So again learn the fha guidelines and the fha requirements.
now you will know the fha loan limits.
1. you will probably have to pay fha pmi.
3. The fha rates shouldn't be higher then conventional rate loans.
Now go find fha lenders or an fha broker, get your refinance or mortgage done and save your home.
Posted by: yanni raz | August 8, 2008 11:40 AM
The payday loan industry is in danger because there are politicians who wish to wipe out the entire industry. But that is not what is best for the people. For instance, in Georgia, the bankruptcy filings, bounced checks and foreclosures all skyrocketed after the cash advance product was done away with. With no disregard for these negative statistics, following the closure of payday loans in these states, several other governors continue to try and follow suit. Top national politicians are now stepping out in hopes of wiping the industry completely off the map. Should such politicians succeed, there is a big possibility that there will be increased unemployment rates, more debt, more foreclosures and an even more damaged economy.
Post Courtesy of Personal Money Store
Professional Blogging Team
Feed Back: 1-866-641-3406
Home: http://personalmoneystore.com/NoFaxPaydayLoans.html
Blog: http://personalmoneystore.com/moneyblog/
Posted by: Payday Loan Advocate | October 8, 2008 11:21 PM