As the credit crunch continues, I wanted to point out some key issues that I am seeing in todays market place that are misleading the average consumer.
FHA mortgages..... (my advice, steer away from loan officers or lenders that advertise what I am about to talk about)
- There is no such thing as 100% financing for FHA mortgages. Yes, you can get 100% gift from family members, 6% seller concession, and even gifts from non-profit organizations.
- FHA has no credit scores. Yes, HUD states this in their mortgagee letter, but it's the investor that sets their own rules. Yes, I have an investor that I can go down to a 500 credit score. Yes, I can actually get a loan down in the high 400's, but it still has to be a decent loan. And yes, I can get a consumer approved with no credit scores, but you can't have any credit on your credit report then.
- FHA mortgages are the next subprime loans. WRONG.... FHA/HUD has been around since 1934 and subprime loans entered the market around 1994. They became very popular after 1997. It costs lenders money to be FHA approved, hence why so many might make you think other loans are better for you. Now, lenders are walking to D.C. to get FHA approved. If you have credit scores under 680 and you are putting 10% down or less.... and the lender tells you that going conventionally is better, I will disagree and say, NO, not true at all. Typically they tell you this because they are either not FHA approved or because they aren't sure. I have proven this many times over, because of simple math. Please read : FHA mortgages vs conventional mortgages
- Mortgage Brokers are okay. (Brokers vs Bankers) But they need to send your loan to another lender to approve. Many of these are taking up to 8 to 14 days to get approved. Please read red flags : Consumers need to be aware of these Red Flags !!!!!
Overall, you just need to speak with those that are ethical, have integrity, and certainly have knowledge of mortgages, especially FHA mortgages. FHA mortgages -- Why are so many consumers having approval issues???
- FHA mortgages - Understanding credit that works -- Part 2 of 2
The First Time Homebuyer Series :
- First Time Homebuyer Tips : FHA, is the best mortgage program? -- Best Programs & Why -- Part 3 of 4
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For more information on FHA loans, please go to this link. The FHA Expert
For more information on how you can obtain your dream home, please click here : Mortgage Financing Options
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!
Copyright © 2008 by Jeff Belonger
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