BUYING A HOME USING THE FHA MORTGAGE- These advantages of the FHA Mortgage loan has made the best low cost mortgage option for move up home buyers as well as First Time Home buyers. Many Bad Credit FHA buyers and No Credit FHA buyers turn to the FHA mortgage when conventional lenders deny their applications. Anyone may use a FHA mortgage to purchase a home as long as you do not have more than one FHA insured mortgage at any one time. Within you will learn all the advantages that only come with an FHA mortgage.
SUMMARY OF THE MORTGAGE ADVANTAGES:
FHA MORTGAGE LENDERS APPROVALS WITH MINIMAL DOWN PAYMENT AND CLOSING FEES:
- Down payment only 3.5% of the purchase price.
- Gifts from family or FHA Grants for down payment assistance and closing costs OK!
- Sellers can credit the buyer’s up to 6% of sales price towards buyers costs and pre-paid.
- No reserves or future payments in account required.
- FHA regulated closing costs.
- Read more about buying a home with an FHA mortgage Bad Credit –No Credit – Investment –Second Home –Multi Family –
FHA MORTGAGE LENDERS MAKE QUALIFYING EASIER BECAUSE YOU CAN PURCHASE:
- 12 months after a chapter 13 Bankruptcy FHA mortgage Lender approvals!
- 24 months after a chapter 7 Bankruptcy FHA mortgage Lender approvals!
- 3 years after a Foreclosure FHA mortgage Lender approvals!
- No Credit Score FHA mortgage Lender approvals!
- 580 required for 96.5% financing or 3.5% down payment FHA mortgage Lender approvals.
- 500 required for 90% financing or 10% down payment FHA mortgage Lender approvals.
- Bad Credit with minimum 500 FICO credit score with 10% Down Payment FHA. For FHA mortgage applicants with credit scores between 500 and 579 must make down payments of at least 10% down!
- Read more about FHA Qualifying Qualification Summary – Manual Underwrite – Collections-Judgement’s – Bankruptcy or Foreclosure – Compensating Factors –
FHA MORTGAGE LENDERS ALLOW HIGHER DEBT TO INCOME & EASIER JOB QUALIFYING
- FHA allows higher debt ratio’s than any conventional mortgage loan programs.
- Less than two years on the same job is OK!
- Self-employed buyers can also qualify with FHA Mortgage Lenders.
- Read More about Gifts For Down Payment – Documents Checklist – Debt To Income – Student Loans –
FHA MORTGAGE LOAN ARE EASIER TO QUALIFY FOR- FHA mortgage guidelines tend to be more lenient in areas such as credit, debt to income ratios and cash to close. Because of this FHA mortgage insurance borrowers will find that FHA mortgage rates are better than a conventional mortgage rates. The FHA mortgage provides all these benefits while protecting FHA mortgage lenders from loss.
LOOKING FOR A BAD CREDIT FHA MORTGAGE LENDERS? Unlike most conventional home loan mortgage programs, the FHA mortgage does not have specific credit score requirements. Although a high credit score may assist in getting the FHA mortgage approved, a low score will not automatically cause denial with most FHA mortgage lenders. If your credit scores are low, then it is up to the FHA mortgage applicant to demonstrate the ability and willingness to pay back debt. This allows FHA mortgage applicants explain the past circumstances surrounding the bad credit issues and have that explanation considered by FHA mortgage lenders approval process.
FORECLOSURE – BANKRUPTCY -SHORT SALE- OK WITH FHA MORTGAGE LENDERS- The FHA mortgage is usually the first choice for FHA mortgage applicants that want to qualify for a mortgage with a recent foreclosure or bankruptcy. For traditional FHA mortgage lenders there is a mandatory 2 year waiting period after the discharge date of a chapter 7 Bankruptcy. There is a minimum 3 year waiting period after a foreclosure, deed in lieu of foreclosure, or a short sale to qualify with FHA mortgage lenders. The FHA minimum waiting period clock starts from the deed or title transfer was filed in public records.The 3 year waiting period after a short sale starts on the date of the short sale which is reflected on the Settlement Statement date.
COLLECTION ACCOUNTS ARE OK WITH FHA MORTGAGE LENDERS- FHA does not count unpaid medical collection accounts ageist you ability to quality. Medical collections are exempt and you can have a high balance of unpaid medical collection accounts and still qualify for an FHA mortgage. Further more, FHA mortgage applicants will qualify for an FHA mortgage with past unpaid collection accounts, charge offs, and even judgments. FHA mortgage lenders DO NOT require that you to pay off your old collection accounts in order to qualify for FHA mortgage approval. With non-medical collection accounts, you do not have to pay off the unpaid collection balance, however, if the total cumulative unpaid collection balance is greater than $2,000, FHA mortgage lenders must 5% of the unpaid cumulative collection balance as a monthly debt obligation and will count it towards your debt to income ratios even though the FHA mortgage lender does not require you to pay the collection account off. There are many FHA mortgage lenders including most if not all local banks that have FHA mortgage overlays which are a set of the lenders own overlaying guidelines that are on top of the FHA’s minimum mortgage lending guidelines. Mostly all local banks will require that all unpaid collections be paid off prior to FHA pre approval letter because they are afraid of the collection agency following judgment proceedings. FHA Mortgage Lenders.com provides a comprehensive list of FHA mortgage lenders with NO OVERLAYS giving you the greatest chance for FHA pre qualification. If FHA’s bare minimum requirements say that no collections need to be paid off, then no collection accounts need to be paid off.
FHA MORTGAGE LENDERS MAY BE RIGHT FOR YOU IF YOU A HAVE ONE OF THE FOLLOWING:
YOU HAVE HIGH DEBT TO INCOME RATIOS- Conventional loan applicants that have been denied conventional financing resulting in high debt to income ratios often seek an FHA mortgage when their ratios do not meet conventional debt to income ratios. Conventional mortgage lenders maximum debt to income ratios are capped at 45%. FHA is much more considerate with debt to income ratios. FHA caps their back-end debt to income ratios at 56.9% percent. FHA mortgage loans have a front-end housing debt ratio cap of 46.9% DTI. FHA loans is a fantastic mortgage program for first time home buyers, home buyers with No Credit Score even Bad credit scores including, self employed, and home buyers who have high debt to income.
YOU HAVE A LOW DOWN PAYMENT AND NOT MUCH FOR CLOSING COST – Your down payment for a FHA mortgage can be as low as 3.5% of the purchase price. And, if the seller agrees most of your closing costs can be paid by the seller up to 6% of the sales price. The FHA mortgage is available on 1-4 unit homes including town homes, villas, and single family homes. Condos must be on the FHA approved condo list to qualify.For FHA mortgage applicants with credit scores between 500 and 579 must make down payments of at least 10%.
YOU NEED A GIFT NOW FOR DOWN PAYMENT –FHA allows the borrower to get 100% gift funds to be used for the down payment and/or closing costs. The Gift funds must come from a relative of the home buyer and a gift letter needs to be signed by the donor stating that the funds is only a gift and is not a loan and does not have to be paid. FHA allows up to a 6% sellers concessions towards a home buyers closing costs. However, the closing costs cannot be wasted so make sure you do not get excess sellers concessions where you cannot apply it to your closing cost. In the event if there is an overage in sellers concessions, it needs to go back to the home seller.
NO CREDIT SCORE OR NOT MUCH CREDIT HISTORY- The FHA mortgage allows FHA home loan applicants to build a credit history using nontraditional trade lines. Non traditional trade lines include proof of timely payment history from direct service providers. Direct service providers include your electric, water, cell phone or car insurance payments. Read more about no credit score home loans.
YOU NEED A NON OCCUPANT CO BORROWER TO HELP YOU QUALIFY– Another overlooked benefit with an FHA mortgage is that if the primary borrower has little or no income documentation, FHA allows the borrower to add a non-occupant co-borrower to increase borrowers income qualification. The non-occupant co-borrower must be related by marriage, blood, or law.
YOU WANT TO BUY A FIXER UPPER- The FHA 203K loan allows FHA mortgage applicants to buy and repair a home, fix it up, and include all the rehabilitation costs in one FHA mortgage loan. Or, if you own a home already that you want to re-model or repair, you can use the FHA mortgage to cash out refinance what you owe and add the cost of repairs – all in one FHA mortgage loan.
NO CREDIT SCORE OR NO TRADE LINES- If you have minimal verified payments reflected on your credit report for a full 12 months, you may need to provide alternate trade lines to prove to the lender your willingness and ability to repay debt. The FHA mortgage loan is the only program that will approve loan applicants with no credit scores!
BAD CREDIT OR LOW CREDIT SCORES- The FHA mortgage can help FHA mortgage applicants with a bad credit history. The FHA mortgage program will even work for bad credit mortgage applicants with a past foreclosure or bankruptcy, divorce ect. Learn all you can about bad credit mortgage qualifying. You are a senior living in a home that you own outright or you have low loan balance. Seniors fitting this profile may be well-suited for an FHA Reverse Mortgage. The FHA reverse mortgage allows you convert a portion of your equity into cash.
YOU WANT TO MAKE YOUR HOME MORE ENERGY EFFICIENT- With a FHA mortgage can include the costs of energy improvements into a FHA Energy-Efficient Mortgage.
PURCHASE MANUFACTURED AND MODULAR HOMES- Some FHA approved mortgage lenders offer FHA mortgage loans on manufactured and modular land and home packages built after June 15th 1976. Read more about the FHA mortgage for manufactured home purchase or FHA refinance.
POPULAR FHA MORTGAGE QUESTIONS AND ANSWERS
- How can FHA help me buy a home? times after buying your home, FHA has many options to help you keep you in your home and avoid foreclosure. FHA does not provide direct financing nor does it set the interest rates on the mortgages it insures. For the best interest rate.
- How can I buy a HUD Home?. HUD Homes are sold in an ‘as-is’ condition without warranty. HUD strongly urges every potential buyer to get an independent home inspection BEFORE submitting an offer to buy a HUD Home to help you learn more about the property.
- What is the primary FHA mortgage insurance program? Section 203(b) is the centerpiece of FHA’s single-family mortgage insurance programs and is the most commonly used by FHA mortgage applicants. It is available in all areas of the country, provided a market exists for the property and the home meets HUD’s Minimum Property Standards. It may be used to purchase or refinance a new or existing one-to-four family home in both urban and rural areas including manufactured homes on permanent foundations. Typically, lenders offer terms at 15 or 30 years, and interest rates are negotiated between the borrower and lender.
or avoiding foreclosure is available on HUD’s websites at:
- What happens if a purchaser who buys a home under a Good Neighbor Next Door program fails to close on the purchase? the Property to back-up bidders before relisting the property. For additional information please contact the Asset Manager with jurisdiction over the property.
- How do Nonprofits and Governmental Entities that buy HUD Homes at a discount submit Individual Property Files to FHA?Individual Property Files refer to files that Governmental Entities and HUD-approved Nonprofits participating in the HUD Homes program must maintain for each Property purchased, sold, or leased when a discount of 10 percent or greater is obtained.
- Where can I obtain the Settlement Cost booklet?The Real Estate Settlement Procedures Act (RESPA) is administered and enforced by the Consumer Financial Protection Bureau (CFPB). For a copy of the “Shopping For Your Home Loan” Settlement Cost booklet.
- Can I rent or “rent-to-own” a HUD home?HUD does not have a rent-to-own program and does not generally rent homes. HUD homes are sold through the regular HUD real estate owned (REO) process to persons and families interested in buying a home. For more information please visit.
- Who is insured by FHA Mortgage Insurance and what are the benefits? hard times after buying your home, FHA has many options to help keep you in your home and avoid foreclosure.
- What is the Housing Voucher homeownership program? and receive rental assistance you may be able to use your voucher to buy a home and receive monthly assistance in meeting homeownership expenses. This program is administered by local Public Housing Agencies (PHA). Not all local PHAs participate in the program.
- Where can I find housing counseling services? or http://www.ncoa.org/ NOTE: AARP is no longer a HUD approved housing counseling intermediary. Housing counseling agencies can give you advice on buying a home, renting, defaults, foreclosures, credit issues, and reverse.
- What options are available if I need rental assistance?. Housing counseling agencies can give you advice on buying a home, renting, defaults, foreclosures, credit issues, and reverse mortgages.
- How can I finance the purchase of a HUD Home?HUD Homes can be financed in a variety of ways. Many are eligible for financing with an FHA-insured mortgage. How a HUD Home is listed determines which FHA-insured financing program applies.
- What FHA programs are available to purchase a manufactured or mobile home?FHA lenders that are approved for Title I may offer Title I home loan financing to a borrower for the purchase or refinancing of a manufactured home, a developed lot on which to place a manufactured home, or a manufactured home and lot.
- What are the requirements for a teacher to buy a HUD Home under the Good Neighbor Next Door (GNND) program?. The bid must be placed for the full list price; however, the Asset Manager (AM) will ensure that the buyer is eligible to participate in the GNND program and will reflect the discount in the accepted sales price. At the time the bid.
- What are the requirements for a firefighter or emergency medical technician to buy a HUD Home under the Good Neighbor Next Door (GNND) program? percent off the list price. The bid must be placed for the full list price; however, the Asset Manager (AM) will ensure that the buyer is eligible to participate in the GNND program and will reflect the discount in the accepted sales price.
- What are the requirements for a law enforcement officer to buy a HUD Home under the Good Neighbor Next Door (GNND) program?. The bid must be placed for the full list price; however, the Asset Manager (AM) will ensure that the buyer is eligible to participate in the GNND program and will reflect the discount in the accepted sales price. At the time the bid.
- Why is a HUD Home not listed for sale? the Property. Should the adverse condition be resolved, HUD may then list the Property for sale. HUD, at its discretion, may also remove a listing or cancel a sales contract and may return all or a portion of a buyer’s earnest.
- What is the HUD HOME grant program?Under the HOME program, HUD provides grants to States and localities that communities use—often in partnership with local nonprofit groups—to fund a wide range of activities that build, buy, and/or rehabilitate affordable housing.
- What is FHA’s Adjustable Rate Mortgage (ARM) program?. To locate an FHA approved lender go to: http://www.hud.gov/ll/code/llslcrit.cfm For additional home buying information visit the following HUD web site.
- What is the American Dream Down Payment Initiative? information on your local homeownership and repair programs, visit the following web site: http://portal.hud.gov/hudportal/HUD?src=/buying/localbuying.
- How do I place a bid on a HUD Home?Homebuyers, including Good Neighbor Next Door (GNND) participants, must use a HUD-registered Selling Broker or Selling Agent to place a bid on their behalf to buy a HUD Home. To locate HUD-registered Selling Brokers in your area, visit.
- Can Rental Income from a property being vacated by a HECM borrower be used in qualifying? for the HECM for purchase transaction; and 3. continue to make the mortgage payment and tax and insurance payments on the existing mortgage. The intent is to prevent the practice known as “buy and bail” where the homebuyer.
- How can I file a housing discrimination complaint?Housing discrimination based on your race, color, national origin, religion, sex, family status, marital status, sexual orientation, gender identity or disability is illegal by federal law. If you have been trying to buy or rent a home or apartment.
- Can a builder charge me more for my home if I do not use the builder’s affiliated lender or other affiliated business partners?Under the Real Estate Settlement Procedures Act (RESPA), the builder cannot charge you more for the home if you do not use his/her affiliated lender or other affiliated companies. RESPA is administered and enforced by the Consumer.
- How do I lodge a complaint about the condition of my new home or my builder?If you have a complaint about the construction of your new home, you should contact your builder and/or the warranty company (if any) to resolve it. You should also contact your lender who has a responsibility to help you resolve issues related.
- FHA Mortgage Information to buy a Home http://portal.hud.gov/hudportal/HUD?src=/topics/buying_a_home