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FHA Loans
FHA loans can be used for many different types of loans. Whether you are buying your first home, fixing up an investment property, or remodeling your current home, the FHA can help you. Since 1934 The Federal Housing Administration has been helping people to become homeowners. The FHA is not a lender; they simply insure your loan so that lenders can offer you better rates. All that is needed for your down payment is as little as 3% of the purchase price of your home, and most closing fees can be included in the loan. A loan from FHA insures that lenders will be provided with a payment, even if the home buyer defaults.
FHA Home Loan Guarantee Program
* FHA loans offer a loan guarantee for mortgage companies. If you acquire a FHA loan to purchase a home, the FHA is not actually lending money to you, the buyer; the FHA simply guarantees the lender in case you, the borrower, default on your mortgage payments.
* You can pay as little as a 3% of the purchase price of your home for your down payment, and finance your closing costs with your mortgage loan. The FHA can guide you toward programs that require no down payment.
* 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.
A FHA loan can allow you to include the costs of your home improvements in your loan. With HUD's 203 (k) program you can purchase or refinance a home that needs improvements and include all repair and improvement costs in the loan.
FHA loans can even help you to make your home more energy-efficient. The FHA recognizes that with a more energy-efficient home, the homeowner can afford to pay a higher mortgage; therefore, the FHA can also include these types of repairs in the original loan also.
Learn About the FHA Energy Efficient Program
FHA loans are funded by financial institutions such as mortgage centers or banks. The Federal Housing Administration is a branch of the Department of Housing and Urban Development and provides lenders with insurance on your loan. The FHA is here to help you become a homeowner. Both the FHA and HUD both offer low-interest loans to qualified borrowers so that they may purchase homes. The FHA and HUD also offer mortgage insurance for those who are part of the VA Home Loan Guarantee Program. Contact a loan specialist to see if you are eligible for this type of loan.
VA Loans
More than 29 million veterans and service personnel are eligible to receive VA loans. The federal government recently improved the VA loan program to make it even more attractive to the nation's veterans. In addition to raising the VA loan limit to $417,100, the VA has made improvements to their Adjustable Rate Mortgage (ARM) program.
Improvements to the VA ARM Loan Program
* The VA has reinstated Adjustable Rate Mortgages (ARM), which allow interest rates to fluctuate with a specified index over the course of the mortgage.
* Adjustable Rate Mortgages feature annual interest rate adjustments.
* Interest rate adjustments will be limited to a maximum increase or decrease of 1 percentage point.
* Rate adjustments will be limited to a maximum increase or decrease of 5% during the course of the loan.
Increase in VA Loan Limits
The new VA loan guaranty increase comes at an appropriate time for the nation's veterans. While the national average home value has appreciated nearly 75% since 1995, the VA loan guaranty amount increased by only 18% in the same time period.
according to the Federal Housing Finance Board, the national average purchase price for a single-family home in October 2004 was $264,540, which is more than 10% greater than the maximum amount lenders could previously provide for a VA loan.
The new VA loan guaranty increase ensures that most lenders will be able to provide a maximum loan of $417,000, which will allow veterans to purchase a home that is well within the national average home price.
Contact a loan specialist to see if you are eligible for this type of loan.
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