Saturday, November 21, 2015

Using FHA Loans to Buy Your House? You Need an FHA Experienced Realtor!


If you're in the market for a home, FHA loans can provide you the means to get into a house much less expensively than a regular loan can, and they're especially beneficial to you if you're of modest means.

However, FHA loans can also be tricky to navigate, and you need to know what you're doing BEFORE you get one...

It's imperative that you have an FHA experienced realtor if you're looking to purchase a home with this type of mortgage, because there are some processes you'll need to go through in order to have the process go smoothly. If you don't do this, it could cost you both time and money you can ill afford.

Having an FHA experienced realtor can help you navigate the process, he or she can make things easier, and set things up so that the process itself is much easier.

Some things you should know about An FHA mortgage:

§ Lower minimum down payment

The down payment for an FHA loan is just 3.5%, as compared to at least 20% for conventional loan, and you can have a family member, charitable organization, or even your employer pay that amount. If you go for a conventional loan, you'll usually need to prove you have the down payment amount yourself.

§ Same interest rates as conventional loans (most of the time)

Usually, FHA loans have similar interest rates as conventional loans, but this will also depend on your credit score. There is an FHA 203K (rehab loan) that would usually result in a higher interest rate due to more risk if the lender is loaning money to rehab the property too. It will be much less than getting a construction loan though.

§ Sometimes okay even with weak credit

FHA loans will often be approved even for those who have had credit problems, whereas conventional loans will be much more difficult to get. What's more important with the loan is your income. Even if you have enough income, you've been at your job for a while, and your job is pretty secure, you might still face problems getting a conventional loan where FHA might be an easier loan to qualify for.

§ Higher ratio of mortgage payment income

With conventional mortgages, you can only have Housing Expense ratios of 28% of your monthly income, and 36% ratios of monthly debt to income to qualify. FHA loans allow a ratio of 29% and 41% respectively.

§ No prepayment penalty

Fortunately, there are no prepayment penalties if you pay your loan off early with an FHA loan.

§ Closing costs can be included in FHA loans (up to 6% of the purchase price)

Closing costs can also be included in these loans, as long as you qualify for the higher amount of closing costs.

Other things in regard to your realtor and FHA loans

Of course, you'll also need to know these things yourself, but it's imperative that your Realtor also knows the differences between conventional mortgages and an FHA mortgage. It's important because if your realtor doesn't know the ins and outs of these loans, he or she may proceed based upon the assumptions used for conventional loans, only to have FHA loan requirements not met and the process itself thwarted.

In addition, most FHA loans require that the home in question be appraised first, and that the property in question is in "habitable" condition. If your realtor knows what FHA requires for a particular property, he or she will be able to account for any possible issues with the appraisal so the process goes as smoothly as possible.

The bottom line?...

In short, if you don't work with an FHA experienced realtor, and you're planning to get your home financed through this loan program, you could find yourself not only failing to get the home you want, but spending money you don't have only to be disappointed in the end. Save yourself a lot of heartache, and find an experienced realtor to work with.

Dustin Miller is a Realtor who specializes in helping FHA buyers and works with homeowners to avoid foreclosure by doing short sales. He works in the Coral Springs / Coconut Creek, FL area as a Short Sale Realtor and resident. If you have any questions regarding your specific situation visit his site for his contact info and feel free to contact him anytime. For more FHA loan answers check out more info on FHA Loan Requirements [http://www.fhaloananswers.com] by clicking the link You can also read more related articles or search for properties including FL Condos at this site
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