FHA-Loans-Information

Many people today are struggling to make their mortgage payments. Many people took out loans that were risky a few years ago and the housing market collapse has caused the interest rates on those loans to go up resulting in many people being unable to keep up with payments. Over the past year or two, there have been record numbers of homes being foreclosed on, and there is no end in sight at this point.  Are you in this situation?  Here is hope for you and it is the FHA Streamline Refinance Loan.

You may be having trouble making your mortgage payment or you are just trying to find ways to reduce your monthly expenses.  Why waste money by paying a larger mortgage payment then you have to.

There are some ways for people to keep their homes and restructure their mortgage to make the payments work for them during these tough times. One of those options is an FHA Streamline Refinance Loan. With this type of refinance, the process is made very simple and there is much less documentation required. There are a few requirements that need to be met in order to obtain one of these loans.

The first requirement is that the current mortgage is already an FHA loan. If the original mortgage was made with a different financing group, then that home would not be eligible for this loan. With the FHA Streamline Refinance Loan, the goal is for the homeowner to lower his or her monthly payment to an amount that is more affordable for them in the short term. Many times, these loans are referred to as having no out of pocket expenses. This can happen in one of two ways.

The first way for the homeowner to avoid any out of pocket expenses is to take a slightly higher interest rate from the lender and have the lender pay the closing costs. While this can save some money up front, it is important to recognize any longer term impact a higher rate might have.

The second option with an FHA Streamline Refinance Loan is to simply roll any closing costs into the new mortgage. This can only be done if there is enough equity in the home to make it work. This would require having an appraisal done on the home.

A final guideline with the FHA Streamline Refinance Loan is that the new loan cannot exceed the amount of the original loan. These loans are not set up to allow the homeowner to take any cash out on a home equity line of credit.  This program is for just reducing your mortgage payment not adding more to the principal amount.

With so many people sitting on FHA loans, this program is definitely worth a look to provide some much needed cash flow each and every month.  This may be the way to save your home from the foreclosure process.  If you want to lower your mortgage payment you need to check into the FHA Streamline Refinance Loan.

Technorati Tags: fha loan, fha loans, fha streamline refinance loan

FHA Loan Mortgage Refinance fha loan, fha loans, fha streamline refinance loan

If you don’t have a large down payment of 20% to secure a conventional home loan than a FHA Housing Loan may be just what you are looking for.  A FHA Housing Loan only requires 3.5% down payment.

Another good point of FHA Housing Loans is you don’t need a high FICO credit score.  Because FHA insures the FHA Housing Loan, lenders are more willing to lend to homebuyers with less than stellar credit.

The author of this article will give you a brief overview and tips on securing a FHA Housing Loan.

Tips For Obtaining FHA Financing For a Home Loan

FHA financing is a great option for buyers that do not have at least 10% as a down payment and/or do not have FICO scores of at least 720. And, there are some important things to know about FHA financing so that when a FHA buyer goes through the process, the stress and frustration is at a minimum, since the buyer is already prepared for the FHA process.

First of all, the main qualifying factors for a FHA loan is that the LTV (loan to value) can not be more than 96.5% of the purchase price, meaning that the buyer needs a minimum of 3.5% as a down payment. That down payment can be the buyer’s own money or be gift funds (funds that are given by friends, family members, employers, etc that do not have to be paid back). Under FHA guidelines, the seller can pay up to 6% of the buyers closing costs, but none of this money can go towards the buyer’s down payment.

There is also an Up-Front Mortgage Insurance Premium (UPMIP) of 1.75% of the loan amount. This fee can be added to the loan amount. And, there is also Monthly Mortgage Insurance (MMI) of 0.55% of the loan divided by 12. Once you obtain 20% equity in the home, you can get rid of the MMI.

So, as you will see, FHA loans are not cheap loans to obtain, but when a buyer does not have at least 10% as a down payment and/or FICO scores of less than 720, it is a great option to get a buyer’s foot in the door to home ownership and the benefits definitely outweigh the negatives on a number of levels.

What is REALLY important to know when going through the FHA process and obtaining FHA financing is that this type of loan is absolutely a full document loan, meaning, the lender wants to see anything and everything about the buyer’s financial history, credit, bank information, tax history, income, debt, and anything else they can know about the buyer.

The buyer needs to give the lender A LOT of documentation and information and this gathering of information can sometimes obtained by the lender throughout the entire transaction, depending on how complete the file was in the first place, when the package was delivered to the FHA underwriter for the initial preapproval.

The underwriters pick apart the information with a fine tooth comb and the information has to be extremely accurate and complete, or the underwriter will ask for additional supporting documentation. It can consist of explanation letters, more documented information, etc. For example, if the buyer had a nick name that is on some information, the buyer will have to explain it. If there is a lapse in employment, alimony, child support, etc, the buyer will have to explain it. If there is a ding on the credit, the buyer will have to explain it.

As a buyer for a FHA loan, you can basically be prepared to explain every detail of your life for the last 2 years. If you want the process to go smooth and faster, the best thing you can possibly do is to get with the lender and give as complete of a package as possible upfront. So, if you have a name change, issue with credit, etc, explain it in a letter upfront. Do not try to hide anything or leave anything out of this package, or else it WILL come back to haunt you and the underwriter WILL catch it and then the process will be delayed.

And, when you are in contract to buy a home, and the package is not fully complete, and the underwriter is asking for all kinds of information that you must gather, it can be very stressful, since now that you are in contract, there are deadlines to meet with the contractual obligations to the seller and deadlines to close the deal on time. Being thorough upfront is the key to success. And, choosing a good lender who is thorough and can help you through the process and gather all the information and screen it well BEFORE it goes to the underwriter is really key to a smooth transaction.

Also, FHA is very swamped with loans right now, so it is a good idea to ask for a 45 day closing for any transaction that is dealing with FHA. 30 days escrows are possible, but it is pushing the envelope and can be stressful to close in that amount of time. Also, asking for a long loan contingency period also takes off some pressure. I am working with a lot of buyers that are obtaining FHA financing and these are the types of things I am running into with these transactions. And, to avoid stress and frustration once a buyer actually finds a home, having the initial preapproval package as complete as possible, will really help a lot. And, making sure to choose a thorough lender definitely helps to make the process smoother.

And, of course, to really make the process run efficiently, the buyer would call me as their Santa Clara and Alameda County realtor who will stay on top of the process throughout the whole transaction and make sure everyone is doing what they need to do to get the deal closed, as well as stay in communication with the buyer consistently so that the buyer always knows exactly what is going on throughout the transaction.

Author: Karen List I have been a full time real estate agent for 14 years and selling homes is my passion because I truly feel that owning a home is invaluable. Check out my website at http://www.karenlist.com for a lot more information and my bio/resume.

Article Source: http://EzineArticles.com/?expert=Karen_List

Do You Want More Information On FHA Housing Loans?

Comments:  As you can see a FHA Housing Loan can be a great option for financing a home purchase if you don’t have a large down payment and you have low credit scores.

You can find another good article on FHA Loans Information here.

Technorati Tags: fha financing, fha housing loans, fha loan, fha loans, fha loans inflormation

Types Of FHA Housing Loans fha financing, fha housing loans, fha loan, fha loans, fha loans inflormation

 Comments:  We all may not have a lot of cash laying around the house or stuffed in a mattress for a down payment on a new home.  Most conventional loans require 5% to 20% down payment in order to get a mortgage for a home.  But there is another way to get a home with only 3.5% down payment.  It is a FHA Loan and the article below will give you the basic FHA Loan Info to see if this type of a mortgage is what you are looking for.

Not only do most of us not have a lot of money for a down payment but our credit history may not be a shinning star.  That is another good thing about FHA loans; you can have less than perfect credit to get FHA Home Mortgage Loans.  The FHA Loan Info is the below article will touch on that area also.

FHA Loans – Can You Still Buy a Home With Little Money Down and Less Than Perfect Credit?

The simple answer is yes. There are still programs available that allow credit challenged borrowers to buy homes with as little as three and half (3.5) percent down payments.

I know the media makes it sound like the banks have stopped lending all together. This simply is not true! The program that I talked about in this article is still closing mortgages everyday. Plus it is one of the most secure programs available. The program has been around for a very long time, but got thrown by the wayside with sub-prime mortgage which caused the crisis our financial system is in right now.

The first program and you probably have heard of it is FHA.

FHA has been around since the 1930s. It was designed to increase home ownership, and reduce the required down payment. Today it still accomplishes these goals plus some. FHA today is used for first time home buyer, credit challenge borrowers, and borrowers with no credit scores. FHA is also a valuable program for borrowers who are looking to refinance their homes.

FHA does have credit guidelines, but they do not look at credit scores.

What is the difference you are asking, for example you can have a 540 FICO score which is a low score, but as long as you have not had any collection, judgments, or bankruptcies in the last twenty four (24) months there is a very good chance you will qualify for a mortgage with FHA. Bankruptcy, FHA does allow borrowers who have filled for bankruptcy. Generally the bankruptcy has to be discharge for twenty four months, but under extenuating circumstances it is possible to get an FHA mortgage after only twelve months after the bankruptcy has been discharge. But you will need to document the reason for the bankruptcy, and the reason you filled must be out of your control.

Qualifying for an FHA mortgage is simple.

First your debt to income ratios should be no more than 32/44. The first number is your housing ratio. The percentage of your monthly income going out to the proposed housing payment including, taxes, insurance, monthly mortgage insurance premium (MIP), and any homeowner association dues (HAO) – the second number is referred to as the total debt to income ratio. This is the total percentage of your income to total debt including the proposed housing payment. FHA does allow a non-occupying co-borrower as long as this person is a family member by blood or marriage.

For example if your debt ratios are to high to qualify for the home you want to purchase you could use a non-occupying co-borrowers income to qualify for the home you want. Also if your FICO score is in the low 500s adding a non-occupying co-borrower with good credit scores will strengthen the over all loan.

Second are the credit requirements, and these are only general rules.

FHA really has no set credit guidelines and allows for exceptions with documented extenuating circumstances. FHA is normally looking for no credit collection (medical collections are always overlooked), no judgments, and no bankruptcies in the last twenty four months (24). If you have no credit this ok as well, but you will need to provide your loan officer with nontraditional credit, acceptable nontraditional credit references include the following utility bills, phone cell or land line, cable, and auto insurance. You will need to provide three accounts with a twelve month payment history for nontraditional credit trade lines.

Third is down payment.

FHA does require a down payment of three and half (3.5) percent, conventional mortgages require at least five (5) percent down with minimum credit scores of 640. However the down payment can come from a gift from a friend or family member. There are also local grants, or bond money that are acceptable forms of down payment. So it is possible to get your down payment paid for. Plus the seller can pay up to six percent (6%) of the total purchase for closing cost , and pre-paid items such as taxes, insurance and days of interest.

FHA has very competitive rates.

Mortgage rates change daily, but on most days FHA has the same rates as conventional loans, so FHA borrowers are getting the same rate on a thirty year fixed mortgage as someone with excellent credit. FHA also has lower mortgage insurance premiums than conventional loans.

 Mortgage insurance is paid to the lender anytime a loan to value is greater than eighty (80) percent it is to protect the lender in case of loan default. Conventional mortgage insurance is based off credit score and loan to value. Rates start at fifty basis points (.0005) of the loan with excellent credit, and goes has high as two points (.02) percent.

FHA has a upfront premium that is financed into the loan of one and three quarter (1.75) percent, and a fixed monthly premium regardless of credit at fifty five basis points (.00055). To calculate your monthly mortgage insurance premium take your base loan amount multiply by your mortgage insurance factor. For example base loan amount of $90,000 * .00055 = $49.50 a month.

Author: D Clark DClark Sr. Loan Officer Cole Realty and Lending, Inc. http://www.midwestfhaloans.com

Article Source: http://EzineArticles.com/?expert=D_Clark

Comments:  As you can see if you have little money for a down payment for a home loan, the FHA Home Mortgage Loan may be what you are looking for.  FHA Home Mortgage Loan has become the key way to get a mortgage since the recent credit crunch.  You can get more FHA Loan Info by clicking FHA Loan Info-FHA Loan Financing VS Conventional.

Technorati Tags: fha home mortage loan, fha home mortgage loans, fha loan info, fha loans

Types Of FHA Housing Loans fha home mortage loan, fha home mortgage loans, fha loan info, fha loans

Comment:  The author gives you FHA Loan Info that compares FHA Loan Financing against conventional loan financing.  He lists five things you should know before you decide which one you should use.  This article will give you a lot of FHA Loan Info.

Conventional Vs. FHA Financing: 5 Things You Should Know

Is FHA Financing a good choice? Yes or else it would not have been used by 30 million people. Is Conventional Financing bad? No. It is just a matter of which service suits your requirements the best.

Good, Better, Best

FHA loans are offered by thousands of lenders and are readily available nationwide and because they all offer identical terms and services, it is worth your while to shop around to get the best possible rates when you either finance for the first time or refinance.

Simple and Basic

FHA Financing is a basic mortgage program implemented by the Federal Government in the1930s with the objective of offering affordable mortgage loan to people who either have had credit problems in the past, are first time home buyers, or have low or moderate incomes.

It has expanded in popularity and is today a choice worth considering by any borrower. FHA Financing has no hidden fees or high increases that may result in foreclosure down the road. The borrower gets both financial security and peace of mind.

Rates, Deposits and Payments

FHA rates are lower than Conventional rates and you are not subjected to pre-payment fees. You can get fixed-rates with FHA which has a big impact on your monthly re-payments and because your monthly repayments are set, you can budget long term. You do not need exorbitant deposits, 3% of the loan amount will do it.

Other financial institutions insist borrowers prove cash reserves when they close the deal and this means that beside the deposit you get heaps of money in savings, something not attainable by the majority. FHA does not ask for reserves.

On top of this, FHA allows owners to provide anything up to a 6% cap of the sale price. This can be in the form of what is called ’seller contributions.’ In the event of a market being slow, or where sellers use their rights to move homes, seller contribution credits secured by the owners, can be put toward paying the buyers closing costs.

Except for the deposit, this may even cover all of the buyer’s closing costs. A word of caution though, contributions by the seller must be attained in writing and must be part of the purchase agreement which is inspected by the provider of the loan. Borrowers must provide sufficient proof of income to demonstrate the ability to pay the mortgage.

Requirements of a conventional loan applicant include excellent credit, job stability with sufficient income, a sizable down payment, and low debt to income ratios. Borrowers who meet Fannie Mae guidelines are rewarded with an interest rate only slightly lower than an FHA interest rate.

Credit Issues

Credit issues affect many people and if you have ever been faced with bankruptcy or foreclosure then the FHA option is your best bet when looking for a mortgage. FHA is more relaxed and lenient toward your application.

The criterion is that if you have been subject to bankruptcy, it must have been a year previously to the load application under Chapter 13 Bankruptcy or two years under Chapter 7 Bankruptcy. Conventional Finance institutions may not even look at you under these circumstances.

Leniency and Understanding

FHA qualifying criteria are that you have permanent employment and can prove you are able to cover your monthly repayments. They also require you produce some sort of credit history, and if you do not have what is called traditional credit, you can use items like utility payments, past rental records, insurance policies or any other report from approved credit providers.

FHA has unusually liberal standards for qualifying and may allow you to borrow a lot more than conventional loan companies. With FHA programs, as much as 43% of your monthly income can be allocated to recurring monthly costs like mortgage payments and vehicles payments.

If you quality, FHA can provide you with 100% of the loan. As the borrower, you are liable for the initial insurance premiums which comes to about 1.5% of the loan amount, but this amount can be absorbed into the loan if need be. Your repayments will be 0.5% of the total loan amount divided into 12 months, and a 3% deposit is required, however no reservations are needed and it can take the form of a gift, but cannot be absorbed in the loan amount. Closing costs are your liability, but can also be funded in the loan amount.

Conventional institutions stipulate the borrower have 5% for the deposit as well as 2 months reserves in the bank and will not fund closing costs in the loan amount.

Citizenship

You do not have to be a citizen to quality for an FHA loan. You can be either a permanent or a non-permanent resident. If you are a permanent resident, you need to prove this via documentation supplied by the Bureau of Citizenship and Immigration Services (BCIS) who are part of Homeland Security.

In the case of non-residency, you need to prove that you can legally work in the country and to do this you will need to produce your Employment Authorization Document issued by the BCIS.

By: mikecole1Article Directory: http://www.articledashboard.com

Mike Cole is a freelance writer who writes about economic issues and financial products pertaining to the mortgage industry such a fixed rate mortgage as well as thelowest mortgage rates.

Comment:  Here is some updated FHA Loan Info.  The author said the down payment for FHA Loan Financing is 3% of the loan amount, it has been changed as of January 1, 2009 to 3.5%.  Also, seller down payment assistance has been eliminated. 

As you can tell, you need to get more FHA Loan Info from your lender because FHA Loan Financing may be the way for you to finance you new home.

Technorati Tags: fha financing, fha loan financing, fha loan info, fha loans

Types Of FHA Housing Loans fha financing, fha loan financing, fha loan info, fha loans

A lot of people are confused about the different types of loans such as insured conventional, conventional, and FHA Housing Loans. 

The article below explains the differences between conventional and FHA Housing Loans and the down payments required by each type.

What Are The Differences Between An Fha Home Loan And A Conventional Loan?

When you are looking at the different loans available to purchase or refinance, it can be confusing. Over the past year there have been many changes in the underwriting guidelines for all mortgages. FHA has become a very popular choice for many home buyers. Let’s take a look at the basic differences between an FHA loan and a conventional loan.

FHA stands for Federal Housing Administration. FHA insures loans that are made by approved FHA lenders, they do not lend directly to borrowers. FHA provides lenders with insurance in case a borrower defaults on their loan.

Fannie Mae and Freddie Mac are government sponsored enterprises (GSE). Their mission is to provide stability and liquidity to the U.S housing and mortgage markets. These GSE’s also do not lend directly to borrowers, but they help to ensure that the banks and mortgage companies have funds to lend at affordable rates. These types of loans are typically conventional loans.

The FHA underwriting guidelines are generally more liberal than on a conventional loan. The minimum down payment required by FHA is 3.5%. All of the down payment can be a gift from a family member. The seller is allowed to pay up to 6% of the purchase price towards the buyers closing costs. To be eligible for the 6% from the seller, it must be negotiated in the purchase contract. The minimum credit score that most lenders will allow on an FHA loan is 580.

At this time, the minimum down payment on a conventional loan is 5% – 10%. Due to the lack of private mortgage insurance available, most lenders are requiring that the borrower have a minimum credit score of 720 for a loan to value of 90% – 95%. The seller can pay up to 3% of the purchase price toward the buyers closing costs. However, they can only pay the non-recurring costs. They are not allowed to pay the recurring costs such as taxes, insurance or pre-paid interest. On an FHA loan, they can pay both recurring and non-recurring costs.

One of the other benefits of an FHA loan is that they will allow a non-occupant co-borrower to co-sign on the loan. The income of both the borrower and co-borrower will be combined and used for qualifying. On a conventional loan, the owner occupant must qualify at 35%/43% ratios unless higher ratios are approved by the Automated Underwriting System.

Another difference between conventional and FHA loans is regarding private mortgage insurance. FHA mortgage insurance is required on all 30 year FHA home loans regardless of the loan to value. FHA has a monthly mortgage insurance premium and an upfront mortgage insurance premium. Even though it is called an upfront mortgage insurance premium, it is usually financed into the new loan. On average, the upfront premium is 1.75% of the loan amount. Once you have paid on the monthly mortgage insurance premium for a minimum of 5 years and the loan to value is 78% or below, you can get rid of the monthly mortgage insurance. Speak to your current lender for requirements to remove the PMI.

Conventional home loans also require private mortgage insurance; however, they only have a monthly mortgage insurance premium. They do not require the upfront MIP. Also, conventional loans usually only require mortgage insurance on loan to values that are over 80%. You can have the mortgage insurance removed from your conventional loan once you have paid for 5 years and the loan to value is 80% or below. Check with your current lender for specific documentation needed to have your PMI insurance removed.

Above is just a few of the differences between conventional and FHA home loans. For more information or to contact me directly, please visit http://www.yourmtglender.com.

By: Patricia Barmatz

Article Directory: http://www.articledashboard.com

Patricia Barmatz has been in the mortgage industry for the past 24 years and specializes in all types of real estate mortgage loans including FHA, VA, conventional and jumbo loans. For more information, please visit www.yourmtglender.com.

As you can see one of the biggest benefit of FHA Housing Loans is the small 3.5 down payment.  Another benefit of FHA Housing Loans is the lower credit score requirement of FHA Housing Loans than insured conventional and conventional loans.

Technorati Tags: fha housing loan, fha housing loans, fha loans

General fha housing loan, fha housing loans, fha loans