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There are many special National loan programs that can make getting a first mortgage easier, especially for low to medium income persons. If you are looking to secure mortgage to purchase you new dream home or wish to apply for additional mortgage to improve your present situation then check out some of the better-known national loan programs like the FHA loans and VA Loans. Read on for more comprehensive information about the two most important Federal mortgage programs and find how secure best terms on your preferred Federal mortgage from a
reputable local lender.
FHA Loan Information to help you Make Right Choices
FHA (Federal Housing Administration) operates under the control of the Department of Housing and Urban Development (HUD) and has the primary responsibility for administering the government home loan insurance program. These mortgages are mainly designed for first-time homebuyers to facilitate buying home with lower down payment and closing costs. The FHA home loan program is open to virtually everyone. There are however a few restrictions placed upon credit and residency that may preclude someone from obtaining a FHA home loan.
The current FHA guidelines permit a relative, a government agency, or an approved non-profit organization to gift the borrower's down payment. HUD does not however permit the borrower to repay the gift. To buy a home with the FHA mortgage loan, the minimum cash investment is three percent of the sales price. Even though the actual down payment may be less than 3 percent, the balance would go towards the borrower's closing costs. In the event that there are no closing costs, the down payment would be increased to 3 percent.
The main advantage to FHA loans is that the credit criteria for a borrower are not very strict. A person having a few credit issues should not have a problem obtaining an FHA loan. Also, FHA home loans are assumable, allowing a person to take over the mortgage without the additional cost of obtaining a new loan. In addition, the seller must pay for part of the "traditional" closing costs (called non-allowable costs), while a borrower's allowable costs can partly be wrapped into the loan. Even 100% of the down payment and closing costs can be gifted.
The main disadvantage of FHA home loans is the upfront mortgage insurance premium (MIP). On a 30 or 15 year FHA home loan that equals to 1.50% of the loan amount, the borrower must pay 0.5% annual renewal premium for the life of the loan. FHA also limits the amount a borrower can borrow.
Secure best terms and rates on your FHA Loan by clicking on the adjacent link.
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