FHA is an Option, you may have not thought about!
3.5% Downpayment Loans Through FHA
Five years ago, it was harder to not get a loan then it was to get a loan. Oh how we miss the good old days! Ever since the financial crisis hit, most lenders have tipped to the other side of the spectrum and turn away a lot of highly qualified buyers. However, it’s not all bad news. Yes, the days of stated income and zero down loans are behind us for now, but that doesn’t mean you need 20% down and prefect credit to get a loan. FHA loans don’t get a lot of publicity, but they are a great option for buyers who don’t have a lot to put down.
Some Facts You Should Know About FHA Loans
1. What is an FHA Loan? An FHA Loan is simply a loan guaranteed by the Fair Housing Authority (FHA) in case of a default. If the buyer defaults, FHA will pay the lender. As a result, lenders are willing to grant larger loans with lower restrictions.
2. How much down will you need? That’s one of the best things about an FHA loan, downpayments are as little as 3.5%.
3. Do you need to have perfect credit? No. Perfect credit always helps, but it’s not required. Credit report should typically have less than two thirty day lates in last two years with a minimum credit score of 620 or higher.
4. Are there income limits to qualify? No. Almost anyone can qualify and you’ll need to have reasonable debt to income ratios.
5. What’s the maximum you can borrow? For Ventura County and Los Angeles County, the maximum FHA loan amount for 2011 is $729,750 on a single family home. Single family includes condos and townhomes. (Read: Ventura and L.A. County-FHA & Conforming Loan Limits Dropping October 2011)
6. Why doesn’t everyone get an FHA loan? The main downside to an FHA loan is that you do pay a small insurance premium that covers the loan in the event of a default. There’s an upfront payment of of the first years premium, then a small ongoing payment.
7. What kind of Interest rate should I expect? Interest rates are about the same as conventional loans and sometimes better.
8. Do I need to be a first time buyer? No. FHA was designed to help those with little money to put down. With the reduction of seller’s equity, many seasoned buyers have little to put down after the sale of their current home. FHA is a great solution for those buyers too.
I’ve had many of my buyers unable to obtain conventional financing get approved easily through FHA. The consensus opinion is that Ventura County and L.A. County prices are at the bottom or have already hit the bottom. We are in a unique time where prices are low and rates are low. The upside is huge. Take advantage of this loan program to get in now. If you need to speak to a lender who specializes in FHA loan, contact me and I’ll refer you to the right person.
- See more at: http://www.conejovalleyguy.com/2011/01/having-trouble-getting-a-loan-8-things-about-fha-loans-you-may-not-know
Keller Williams, 23975 Park Sorrento #110, Calabasas, CA 91302
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