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Understanding FHA Loans
If you have applied for a home loan and have been turned down
a FHA loan may be an option for you. An FHA loan is a loan
that is insured by HUD. This way HUD will assume some of the
risk on your loan. Sometimes, you may even be able to qualify
for a gift program that will allow you to purchase a home
with no money down.
An FHA loan can help you whether you are
a first time home buyer, or you want to refinance your existing
home loan. There are no income limits or credit scoring for
you to qualify for a FHA loan. If you have average credit
and can afford the monthly mortgage payments you should be
able to qualify for a FHA loan.
An FHA loan has various programs to choose
from which include:
* “Section 203(b)” this type of FHA loan program is for a
single family dwelling that has a low down payment that can
be as low as 3%, which means that you are allowed to finance
up to 97% of the value of the home.
* “Streamline Refinance” this helps the underwriters with
the amount of paperwork they need to do, so your FHA loan
can be financed quicker. * “Section 203(k)” this type of FHA
loan program allows you to borrow for the purchase of the
home and the rehabilitation with just one loan.
* “Section 203(i)” this FHA loan program helps with the purchase
of a home that you will live in the majority of the year in
a rural area.
* “FHA ARM” this is an adjustable rate loan for purchasing
or refinancing a home in which you live the majority of the
year at a lower interest rate.
* “Property Improvement Loan Insurance (Title I)” This program
is for home improvements, you must meet certain requirements.
* “Energy Efficient Mortgage” this type of FHA loan program
is for mortgage insurance that also incorporates the cost
of adding energy improvements to your home.
* “Reverse Mortgage” this FHA loan program is for home owners
that are 62 and up who have already paid off their mortgages
or only have a small balance left on their loan.
Some fees known as closing costs will also
be part of your FHA loan program. Closing costs are usually
made up of the following:
* Attorney fees
* Escrow fees
* Property Taxes
* Interest
* Fees to record the information
* Survey fees
* Your first premium of your mortgage insurance.
* Title insurance
* Your first payment to your escrow account
* Paid insurance policy for fire and flood insurance Other
fees may apply.
Many people are now applying online for all
types of FHA loans. This can be very convenient for many of
us. There are also many companies online today that can give
you the current mortgage rates for FHA loans for the city
and state that you live in. Without even leaving home you
will be able to check the current rates and find lending companies
in your area that have the lowest mortgage rates available.
Do not apply for your FHA loan with a company
just because their mortgage rates are lower than the last
one you checked out. Be sure you check every option in every
loan package to insure that you are in fact getting the best
type of loan with the options that you need.
Do not give up on owning your own home; there
are many loan options available, talk with a lending company
about applying for an FHA loan.
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