| Question |
 |
I've heard that FHA home loans are good for first time home buyers. Is this true and what are they?
We are looking to buy our first home this year and we are trying to learn about the different types of financing options available out there.
|
| By
pureofheart |
Posted on
03/26/08 Total Answers
7 |
|
| Answers- |
| FHA loans are good because they only require a small downpayment, 3% and are available to people who may not otherwise qualify for a conventional loan, say for instance due to credit history. However, if you have excellent credit and a downpayment it can sometimes still be better to go with a conventional loan. |
| Answer by :
lepr0kan On Date
2008-03-26 11:42:05 |
|
| Lower down payments and easy qualification guidelines. They are also guaranteed by the govt |
| Answer by :
Beatrice C On Date
2008-03-26 11:43:08 |
|
| Yes, FHA loans are excellent for first-time home buyers because it's easier to qualify.
Loans backed by the government allow for a lower credit score, and lower income. Generally, a convential conforming loan has been until recently a cheaper loan, but the FHA alternative is actually nearly the same right now.
Definately ask your mortgage professional about an FHA loan. |
| Answer by :
Gerry R On Date
2008-03-26 11:49:23 |
|
| If your credit is less than perfect, FHA might be the loan for you. You may qualify for an FHA loan even though you have had financial problems.
Now, FHA does not make loans or guarantee loans. It insures loans. The insurance removes or minimizes the default risk lenders face when buyers put down less than 20 percent. Without further approval from FHA, its approved lenders are authorized to:
Take loan applications, Process loan applications, Underwrite and close the loan.
There is little or no adjustment to the interest rate for an FHA loan, as the rates vary within .125 percent of a conventional loan.
Mortgage insurance is funded into the loan, meaning a premium of 1.5% is added to the loan balance instead of being paid out-of-pocket. In addition, a small portion for the mortgage insurance premium is added to the monthly payment, but it is far less than private mortgage insurance premiums.
Borrowers can finance 97% of the purchase price and put down 3 percent. In some instances, when combined with other types of loans, the down payment can be zero.
Allowable debt ratios are higher than the debt-ratio limits imposed for conventional loans.
FHA loans are available to anybody but are used most often by first-time home buyers and low- to moderate-income buyers. |
| Answer by :
belen2499 On Date
2008-03-26 11:50:26 |
|
| Yes, they are a good option, but don't limit yourself to just that one. Ask your realtor or a banker what other options you have available to you. For example, in Kansas we have a "rural farm & development loan" or something like that which aside from the large cities (i.e. Topeka, Wichita, KC) any town qualifies for and there's no PMI with it....check all of your options, weigh them, and make an informed decision.
Also, FHA loans are loans that some sellers won't work with. Because the guidelines specify that the house can't have peeling paint or whatever, if a seller isn't willing to fix those things (because you aren't allowed to do them), then you could miss out on your dream house just because one window could use a fresh coat of paint. |
| Answer by :
farmgirlup84 On Date
2008-03-26 11:54:17 |
|
| What state are you in? Don't forget about state sponsored programs also. Some states have really cheap bond money for first timers. Bottom line, get in touch with a knowledgable mtg broker and find out your options, and your qualifications. Good luck! |
| Answer by :
Tony D On Date
2008-03-26 12:16:07 |
|
| I think if you dont have to go FHA DONT! Other lenders can match or beat their rates and wont charge you A TON in closing costs! Also, you have to pay mortgage insurance for 5 years no matter how much value you have. So if you went to another lending program you may only have to pay for a year or two. Good luck! |
| Answer by :
BROOKE A On Date
2008-03-26 14:43:22 |
|
