Federal Housing Loan Could Make It Simpler To Buy
Huge changes at the Federal Housing Administration, a federal housing loan insurer, means it may be simpler than you might reckon to jump into the devastated housing market.
For many homeowners, an FHA loan has become the way to buy a house.
The National Association of Realtors said the FHA is expected to back as many as one-quarter of the mortgages signed in 2009.
Down payment requirements are minimal. Buyers need only 3.5 percent of the house’s price tag, unlike the conventional 20 percent. So if you stay within your budget, and can afford a 3.5 percent down payment — even with family help – you can become a homeowner.
Secondly, you can get an FHA loan even if your credit history is less than stellar.
Also, you must have a two-year employment.
On the flipside, FHA loans are more expensive than conventional loans backed by the 20 percent down payment.
Buyers with lower down payments, like those who turn to the FHA, pay a larger premium for mortgage insurance.
If the house you want to buy needs repairs, the FHA has another program to help you, called 203k. The program allows buyers to borrow the price of the house and funds for home repairs, all in one loan.
The bottom line: Prices are falling, and inventory is high. It’s a buyers’ market.
You might want to check out this link http://www.examiner.com/x-39888-Phoenix-Real-Estate-Financing-Examiner and read my article ?Is FHA too big to fail? ?. By the way, FHA loan volume is off substantially so far this year. ...