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FHA Home Loans FAQ's

Get to know FHA, it's going to be a good friend of the real estate recovery for buyers and sellers.

FHA loans can do many things that conventioanal loans cannot. Let's start by dispelling some of the myths that I keep hearing.

Myth #1--FHA loans are harder to get done then conventional. Actually, it is the opposite. In most cases, FHA has more lenient restrictions then conventional. Here are some examples:

Only 3.5% down required
Entire down can be a gift
Can lend to a 55% expense ratio
no reserves are required
Seller can pay 6.0% credit towards ALL costs (not downpayment) due at closing
Lower credit score requirements
You can add as many coborrowers as you need to make a deal work.

Myth #2--FHA is slow. It is true that they can't be rushed that fast, but they are not slow. I can have a lender approval for you within a day of taking the loan application. The file won't need a second signature, or to be passed around for different departments to review.

Myth #3--FHA is more expensive. The monthly MI payments are quite a bit smaller. Also, since there is less risk in the loans for the lender, these rates seem to be a bit lower.
There are some important things to understand when doing an offer that will use and FHA loan. First, the condition of the property is important. A termite report is required. Also, an appraiser may comment on repairs that he feels are health and safety issues. Examples are, torn or filthy carpet, holes in walls, broken appliances, missing light fixtures, broken windows, etc. The idea is that buyers with minimum down payments will not be facing expenses or dangers when they move in.

Also, FHA offers a unique refinance opportunity to borrowers. If rates drop, we can do a new loan that DOES NOT require new credit, new appraisal, new income documentation, etc! We simply replace the loan with a better one!

Rates right now are about 6% for a 30 year fixed. Subject to change daily, call me for today's rates. 661-287-4466 ext. 226

PERS and STERS: Great programs for government employees
Loans for government employees can have some great advantages. These programs allow employees who are contributing into their retirement funds to obtain a home loan with only 3.0% down. There are three reasons these loans are even better than FHA loans. First, the loan is broken into two loans. The first is at 80% and avoids any MI premiums. Second, the junior lien requires no payments for five years. It still accrues interest at the same rate the first loan does, however, it is deferred until year 6. Finally, the borrower must have only 1.0% of their own money as down payment.

Visit our website to search for homes and apply for an FHA loan. You could be moving sooner than you thought. www.scvRealty.com
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