Why More Homebuyers Are Turning to FHA Loans
by Zeus John Martinez
Federal Housing Administration (FHA) loans are getting more people to buy homes during the housing crisis. Previously, private lenders tightened lending procedures for conventional loans and made it difficult for borrowers to get loans.
Because of federally insured loans, more people have bought or refinanced their houses through the FHA. 530,000 FHA loans were given out this year and this was more than a hundred percent increase compared to last year.
So what exactly do you get from FHA loans?
- Favorable interest rates and lower costs, since the government insures the loans - FHA loans have a lower down payment of 3 percent - Bigger chance of getting approved - You don't need very good credit to qualify for an FHA loan
FHA loans are recommended if you: - Are a first-time homebuyer - Don't have a good credit history - Don't have enough money for the down payment of a house - Want monthly payments as low as possible - Don't know what to do if your mortgage payments suddenly shoot up
FHA's 30-year fixed-rate loans will allow you to pay the same amount from the beginning to the end. You can then plan in terms of your budget. The adjustable rate loans can be used by first-time homebuyers who are having financial difficulties. This allows for starting payments that are as low as possible. Rehabilitation loans are for those who plan to buy a house that needs many repairs. This type of loan combines the mortgage and cost of repairs in one mortgage loan. Homeowners aged 62 and above can use the reverse mortgage loan, which allows them to convert their home equities to monthly payments or a line of credit, which they only pay back when they no longer reside in the house.
MortagesForEveryone.com ( http://www.mortgages-for-everyone.com ) is a site that aims to provide information on mortgage-related concerns, such as refinancing your home, interest rates, using your home equity, down payments, home improvement loans, and many others.
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