Federal Housing Authority Gives Foreclosure-Safe Service
Lenders are now tougher in approving loans. With the flooding of foreclosure, lenders are now very careful in giving out mortgages.
But the Federal Housing Administration is giving out a good offer with only 3.5 percent-down loans. With this opportunity, tons of potential homebuyers applied to qualify for FHA’s offer. Of these, 630,000 were aided to purchase a home in 2008.
So, how to avail an FHA-insured mortgage?
- Contact an FHA-approved lender.
- Know if you qualify. Income is a qualification to be eligible for an FHA loan. Mortgage payments must only be 31 percent of your over-all income.
- Know that credit scores matter but are not the basis of interest rates. But those who have less than 500 points must give a 10 percent down payment not the usual 3.5 percent minimum.
- Add 1.5 – 2.55 percent of the mortgage value to insurance premiums. This will cover potential defaults that end up in foreclosure.
Know that there are loan limits. The average limit is at $272,500. But in California and New York, the border can reach $625,000 for a single family home and $271,050 in Hawaii.
FHA has a great track record with preventing their borrowers from losing their homes to repossession.
Though they have a high delinquency rate at 12 percent, FHA has a well strategized mitigation process that foreclosure cases are rare. FHA cooperates with their delinquent clients payment postponing and practices onetime payment from insurance funds to prevent foreclosure.
That is why less than 1 percent of FHA loans end up in foreclosure, while subprime loans have 4.5 percent of their loans into repossession.
FHA assistance is ideal for first-time home buyers. These homebuyers will purchase from existing owners who will then buy newer and more expensive houses. This would hopefully re-ignite the housing industry that was put-off by foreclosure.
It is great that during this crisis, there are still some lenders who offer affordable rates. This hopefully shakes up the drowsy housing industry and put foreclosure in deep sleep.