As the market shifted we found it extremely important to begin becoming an expert in FHA financing. The FHA is quickly becoming the lending vehicle of choice for many wanna-be Home owners. Here are some little known SECRETS of FHA Loans.
- FHA Can Help Clients With Blemished Credit History. New programs are coming out that will allow borrowers with less than perfect buy a home.
- Bankruptcy. You can obtain an FHA loan two years from the date of your bankruptcy discharge, as long as you've maintained good credit since your debts were discharged.
- Foreclosure. If you keep your credit in excellent shape after a foreclosure, an FHA loan will be available to you two years from the final date of your foreclosure.
Ultra Competitive Rates & Terms
* There is little or no adjustment to the interest rate for an FHA loan, as the rates vary within .125 percent of a conventional loan.
* Mortgage insurance is funded into the loan, meaning a premium of 1.5% is added to the loan balance instead of being paid out-of-pocket. In addition, a small portion for the mortgage insurance premium is added to the monthly payment, but it is far less than private mortgage insurance premiums.
* Qualifying Borrowers can finance 97% of the purchase price and put down 3 percent. In some instances, when combined with other types of loans, the down payment can be zero.
- Allowable debt ratios are higher than the debt-ratio limits imposed for conventional loans.
- Borrowers can get up to 6% back from the seller to help with all of their closing costs.
Forget what you thought you knew about FHA...
At one point, FHA repair demands were so excessive that sellers would discount the list price to buyers who would agree to obtain conventional loans over FHA loans. Today the requirements appear more reasonable.
* You can purchase a home in need of repairs and finance the repair costs with the mortgage. This way you can make the necessary repairs immediately without having to come up with the money yourself.
* You can purchase manufactured homes and condominiums with a FHA loan.
* You can finance the cost of energy-efficient repairs with the mortgage.
* Defective roofs that leak still need to be replaced but an older roof does not necessitate replacement if it doesn't leak. An roofing certification is acceptable in most cases.
* Windows that stick upon opening or have cracked panes do not require replacement.
* FHA appraisals do not take the place of a home inspection, and never have. Buyers should still obtain a professional home inspection.
It's time to take advantage of the return of the FHA loan! It's about to become significantly better than before, with higher limits and an easier appraisal process. If you have questions or comments let me know I have spent hours trying to become an FHA EXPERT, which is a challenge with the everyday mortgage changes.