Chance Gates' Blog » Home Buyer http://chancegates.com Reno/Sparks Nevada Real Estate Wed, 23 May 2012 16:06:23 +0000 en hourly 1 http://wordpress.org/?v=3.3.2 FHA Loans http://chancegates.com/2009/01/fha-loans/ http://chancegates.com/2009/01/fha-loans/#comments Fri, 23 Jan 2009 17:00:39 +0000 Chance Gates http://cgates.blogs.rwnetwork.com/2009/01/23/fha-loans/
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FHA Loans have several advantages over conventional loans, including lower down payments and more relaxed credit-qualifying guidelines. The federal government created FHA loan programs to encourage homeownership throughout the country. The FHA can help people to obtain a loan with little or no down payment. The FHA does not supply the loan; it simply insures the loan to limit the risk to the lender.  HUD and FHA offer many valuable programs to offer people who wish to purchase homes.
Benefits of a FHA mortgage:
  • A 3% down payment, as opposed to a 5% down payment on traditional loans
  • Low monthly mortgage insurance
  • Low closing costs, which are regulated by HUD
  • No credit score requirements
  • Qualify for a loan two years after a bankruptcy
  • Qualify for a loan three years after a foreclosure
The FHA loan guidelines are more relaxed than conventional loan guidelines; this includes less strict regulations about past bankruptcies and/or foreclosures, job requirements, use of alternative credit, and debt-to-income ratios. The FHA ensures that their interest rates remain competitive with the interest rates of conventional loans.
FHA loans were originally created to help first-time buyers; people who are not first-time buyers may qualify, however, the FHA does not allow anyone to have more than one FHA-insured loan at a time.
The borrower is required to pay an insurance premium upfront, but this premium can be financed into the loan amount directly. The borrower must also pay a monthly premium, which is .5% of the total loan amount divided equally over 12 months. Unlike a conventional loan, the FHA requires a termite report and clearance, as well as a few other property condition standards, to qualify for a loan.
Types of FHA Mortgages
  • Conventional Fixed Rate Mortgages are set for a certain amount of time at a specific interest rate. The interest rate never changes, which means that your mortgage payment remains the same throughout the life of your loan except for fluctuations in property taxes and homeowner’s insurance. Fixed rate mortgages are usually not assumable and often have a prepayment penalty. Fixed rate mortgages are good for people who plan to own their home for a long period of time.
  • Conventional Adjustable Rate Mortgages are set for a certain amount of time, but the interest rate changes over the lifetime of the loan. Usually the interest rate is a fixed for the first three or five years, but after that period of time the interest rate will rise and so will your mortgage payments. Adjustable rate mortgages are good for people who plan to stay in their home only for the amount of time that the interest rate is fixed.
  • Hybrid Mortgages are similar to adjustable rate mortgages, but the fixed-rate time period is usually longer. For example, a hybrid mortgage may have a fixed interest rate for the first ten years and then the interest rate will increase. Hybrid mortgages are good for people who plan to spend many years in their home but know that they will eventually move into a new home.
  • Jumbo Fixed Rate Mortgages are specifically for borrowers who are seeking a mortgage for $333,700 or greater. It is risky for a lender to finance a mortgage this high, so jumbo fixed mortgages are designed for large mortgages that are set for the lifetime of the loan, and the interest rate is usually higher than a conventional fixed rate loan.
  • Balloon Mortgages are when a borrower makes smaller payments at the beginning of the mortgage and then pays off the entirety of the loan at a later date. This is good for people who know they will have a large sum of money in the future, or for people who need a lower payment now but expect to make more money in the future.
  • Relocation Mortgages are available for people who need a loan to relocate to a new home while their existing home is for sale.
  • Bridge Mortgages are similar to relocation mortgages; you can purchase a new home prior to the sale of your existing home. You will have a larger mortgage payment because you will pay for both homes until the existing home sells. However, if there is a home you want to purchase immediately and you are afraid that it will sell while you wait for your existing home to sell, then you can purchase the home with a bridge loan.
  • Equity loans allow you to take a loan out on your home based on the existing equity percentage of your home.
  • Self-Employed Income Mortgage Loans are available for people who are self-employed, and thus have difficulty showing proof of a steady stream of income.
  • The VA’s Home Loan Guarantee Program for veterans is very similar to FHA loan programs. Veterans can get loans through the FHA to buy a home with no down payment, and get money to make home and energy-efficient improvements to their new homes.

These are just some of the many loans available for people who are looking to purchase a home through the FHA

Being a Reno/Sparks real estate consultant I always appreciate any question or comments on the Reno/Sparks real estate or any of the articles I post.

Send all questions to chance@ballard-company.com

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]]> http://chancegates.com/2009/01/fha-loans/feed/ 0 FIRST TIME HOMEBUYER PROGRAM http://chancegates.com/2008/12/first-time-homebuyer-program/ http://chancegates.com/2008/12/first-time-homebuyer-program/#comments Wed, 31 Dec 2008 18:21:55 +0000 Chance Gates http://cgates.blogs.rwnetwork.com/2008/12/31/first-time-homebuyer-program/
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The Nevada Housing Division First Time Homebuyer Program offers to low- and moderate- income first time homebuyers fixed interest rate 30-year loans with additional
assistance available for down payment and closing costs.

Qualification Guidelines

  • A first-time homebuyer is someone who has not owned or co-owned their own residence within the past three years. If purchasing in a Targeted Area there are no restrictions on former home ownership.
  • The purchase price of the residence you wish to buy may not exceed the Maximum Purchase Price Limits for the area in which it’s located.
  • Assets, including without limitation, may not exceed 50 percent of the purchase price of the residence being purchased, unless disabled or elderly and such assets are the primary source of income. There is a lower asset test for down-payment loans — maximum $5,000.
  • Income must support the repayment of the loan pursuant to the underwriting criteria applied by FHA, VA, RHS, or Fannie Mae, as applicable.
  • Credit must meet the underwriting criteria applied by FHA, VA, RHS, or Fannie Mae, as applicable.
  • Successfully completes a HUD approved in-person 6 to 8 hour Homebuyer Counseling Course.

As a Reno/Sparks real estate consultant I always welcome any comments or questions on the Reno/Sparks real estate or any of the articles I posted.  You can email me directly at  chance at ballard-company.com

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