As discussed in earlier blogs, FHA loans are becoming more prominent with regards to home financing. The newest figures have around 20% of all closed loans in the 3rd quarter of 2008 being government loans; FHA, VA, USDA. That number figures to rise to 25% or 1 in 4 loans closing by the beginning of 2009 being a government loan.
One of the true benefits of a government type loan is the no to low down payment; VA – no down payment required, USDA – no down payment required and FHA - 3% down payment required (3.5% as of January 1, 2009).
In keeping with this theme, there is another low down payment program offered through FHA in purchasing a HUD home. A HUD home is a 1 to 4 unit residential property that HUD has acquired after an FHA mortgage is foreclosed on. HUD now owns the home and in turn offers it for sale to recover any losses after paying off the bank/lender.
Any buyer purchasing a HUD home with FHA financing is eligible for the $100 down program.
Typical FHA guidelines are in play, the property must be their primary residence, they must be able to prove income, employment and assets, have sufficient credit, etc. HUD does not require the borrower to use FHA financing to purchase a HUD home BUT one way to capitalize on the $100 down program is through FHA financing.
Please make sure you familiarize yourself with a particular bank/lender that not only specializes in FHA financing but one that also utilizes this specific program.
Saturday, November 29, 2008
Tuesday, November 18, 2008
Lenders Stepping Up?
Every time you turn on the television or radio, the voice on the other is constantly reminding you of the rising number of foreclosures. In response to this growing crisis, many mortgage lenders are utilizing loan modifications as a tool to help stem the tide.
In a nutshell, loan modifications are an agreement by a lender to help change the terms, length or rate on a borrower’s current loan. Just last week, mortgage financing giants Fannie Mae and Freddie Mac made public their intent for loan modifications.
Seeing as over 60% of all loans are serviced by these two entities, understanding their criteria is important:
• The borrower must be delinquent three months or more
• It must be the borrowers primary residence
• Not filed for bankruptcy
• To ensure the borrowers are paying NO more than 38% of their income on housing expenses.
Some lenders are becoming more aggressive than others in their loan modifications. Citi Mortgage just announced they are not waiting on delinquencies to set in, they are focusing on helping borrowers still current in their mortgage payments and those in areas where unemployment is high, to name a few.
As you can see, there are many different plans out there for almost every type of homeowner. The first step for many is to contact their lender directly, not waiting till it is too late.
In a nutshell, loan modifications are an agreement by a lender to help change the terms, length or rate on a borrower’s current loan. Just last week, mortgage financing giants Fannie Mae and Freddie Mac made public their intent for loan modifications.
Seeing as over 60% of all loans are serviced by these two entities, understanding their criteria is important:
• The borrower must be delinquent three months or more
• It must be the borrowers primary residence
• Not filed for bankruptcy
• To ensure the borrowers are paying NO more than 38% of their income on housing expenses.
Some lenders are becoming more aggressive than others in their loan modifications. Citi Mortgage just announced they are not waiting on delinquencies to set in, they are focusing on helping borrowers still current in their mortgage payments and those in areas where unemployment is high, to name a few.
As you can see, there are many different plans out there for almost every type of homeowner. The first step for many is to contact their lender directly, not waiting till it is too late.
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