Monday, February 4, 2013
FHA Foreclosures: Discounting an Already Low Priced Property
FHA foreclosures are properties secured by an owner through an FHA-insured housing loan. When the owner fails to meet their mortgage obligations the FHA repossesses the home and sells it to other buyers. These properties can be found in real estate web sites commissioned by the HUD to sell the homes. Realtors accredited by the HUD can likewise offer these homes with their commissions being paid by the government agency.
FHA foreclosures are offered to the market in their present condition. Since the agency will not pay for all the needed repairs it is imperative for buyers to conduct a thorough home inspection with a professional home inspector. Perhaps the major draw of FHA homes is that they require a down payment that is equivalent to only 3.5 percent of the price of the property. Private home financing schemes require at least 20 percent of the contract price. Plus the FHA does not really mind the source of the down payment so it could be the buyer's own money, a gift from a family member or a grant from a charity. Closing costs are also significantly lower than conventional loans making it all the more easier for middle- to low-income families wanting to buy their first home.
Other Loans and Grants from the FHA
There are several loans structures offered by the FHA to suit every need a buyer may have. Borrowers can oped for either a fixed-rate or an adjustable-rate mortgage. Other loans available for qualified borrowers include energy efficient loans or graduated mortgages. The very popular FHA 203K Mortgage allows individual to secure a loan to renovate the property or to purchase another home in another city or state.
Buyers interested in FHA foreclosures should seek the advise of a real estate agent and broker. There are several requirements to meet and guidelines to follow and some professional help is in order. But before you even consider this type of foreclosure make sure you have a good credit record and can qualify for a home loan in the normal way.
Article Source: http://EzineArticles.com/5272362
Posted by 203konline