Making dreams come true with FHA mortgage loans
Article by Mortgage Guru
FHA mortgage loans might be something new to many as they differ from the conventional 30 year fixed rate loan plans that many of us are familiar with. The FHA offers several different types of FHA mortgage loans to its clients and you can decide which would be the best option for you based on their unique financial conditions and circumstances. ? Fixed rate FHA mortgages- these are typically 30 year loans with a fixed stable interest and payment rates for the entire time duration of the loan. This can be the best option for those who intend to stay in their homes for a long duration of time.? Adjustable rate FHA mortgages- typically with these loans the initial interest and payment rates are low for the first five years and change after that for the entire course duration of the mortgage loan. They may go higher or even lower depending on the 1 year Constant Maturity Treasure Index which may rise or fall. ? Rehabilitation loans- these are loans for buyers of distressed properties who can get a loan for both the mortgage as well as the repair costs. A detailed proposal and cost estimate for the repair is required to be presented for the loan to get approved. ? Loans for home on Indian Reservations and other Restricted Land- these loans are reserved for Indian tribe members who might want to apply for a loan on a property on tribal land. There are terms and conditions that apply for this. An FHA loan can be very helpful in enabling first time home buyers to qualify to purchase homes easily. There are a few things that an applicant will require in order to gain eligibility to apply for an FHA loan. There are:9. If you are looking for a primary residence10. Have a valid social security number11. Are a legal resident of America12. You are of legal age to sign a mortgage contract documentAmong the top advantages of the FHA loan is the fact that you do not require the usual 20% down payment to purchase your home. A down payment of as little as 3% is sufficient to get the process rolling. As with any other loans, there are several FHA guidelines that apply to those who apply for this loan. Some of these guidelines are: 1. Having a decent credit history which shows that you have had no trouble paying your bills on time in the past. Ensure that you also have not filed for bankruptcy in at least the past 2 years. 2. Your loan amount depends a lot on your income bracket and how much you will be able to pay monthly to ensure that you are not signing up for something that might become a financial burden in the years to come. 3. You must be able to fork out at least 3% as the down payment for your new home purchase. 4. The home that you choose as collateral must be worth at least 3% more than the loan you are up against. FHA mortgage loans have proven to be very useful for many Americans who have had desires to purchase homes but have not had the required 20% as a down payment due to their lower income brackets. See that you meet the eligibility requirements and guidelines and be on your way to owning the home that you have always dreamt of having.
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