FHA Mortgages Explained

Why ask for an FHA mortgage loan? There are many reasons to ask your lender for an FHA loan instead of a conventional loan or an expensive, risky sub-prime loan.

  • Lower cost – FHA loans have competitive interest rates because the Federal Government insures the loans. Always compare an FHA loan with other loan types.
  • Smaller down payment – FHA offers a low 3% down payment, and that money can come from a family member, employer or charitable organization. Many other loans don’t allow this.
  • Easier to qualify – Because FHA insures your mortgage, lenders are more willing to give loans with lower qualifying requirements, so it’s easier for you to qualify.
  • Less than perfect credit – Even if you have had credit problems, such as bankruptcy, it’s easier for you to qualify for an FHA loan than a conventional loan because FHA insures your mortgage.
  • More protection to keep your home – FHA has been around since 1934 and will continue to be here to protect you. Should you encounter hard times after buying your home, FHA has many options to help keep you in your home and avoid foreclosure.

Applying for your FHA loan:

The loan officer will help you complete a loan application and have you sign a several forms authorizing the lender to verify (check on) your employment, income and savings. Using that information, your lender will order an FHA case number, an identification number specifically for your loan application.

The lender will also order an appraisal to find the value of the property and its condition. An FHA appraisal is no different than other appraisals.

The lender will also review the appraisal, to determine if the value of the property supports the sales price and to see if any property repairs are required. The lender then makes a decision on your application.

Signing Closing papers:

You’re finally ready to go to “settlement” or “closing.” Be sure to read everything before you sign. In addition to signing a lot of documents, you may need to bring some extra money for certain closing costs.

Deciding on an Escrow Account after a Refinance

The monthly mortgage dues of a borrower consist of homeowner’s insurance, private mortgage insurance and property taxes apart from the mortgage principal and interest payments. Lenders require that you pay the insurance amounts and the property taxes in an escrow account held by a third party called escrow services....

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HUD Guidelines for Manufactured Homes

A set of directives prepared by the Department of Housing and Urban Development (HUD) may have served to enhance the quality of manufactured homes. Homebuyers are quite willing to apply for mortgages for this highly affordable quality of housing. Here are the key guiding principles put forward by the...

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