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Friday, 09 January 2009 08:25
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 FHA Mortgages May Be the
Way to Go in 2009
By Jeffery Hammerberg
To The Federal Housing Administration (FHA) has seen a surge in demand for its loan products as the cost of other non-FHA loans have increased and their availability has diminished dramatically. So an FHA loan may be the best option for anyone buying or refinancing in 2009.
Here's how the FHA works, and why their mortgages may work nicely for anyone wanting to buy or refinance during the uniquely challenging economic climate of 2009:
The FHA does not actually make mortgages, but it insures them in order to give reassurance and financial support to those who do make loans directly to homeowners. In other words the FHA makes it less risky for lenders, which is a powerfully beneficial service at this particularly nervous time in our nation's financial history. When a lender makes an FHA approved loan, they get guarantees that if the homeowner defaults the FHA will pay the lender in the form of a mortgage insurance claim. Because of this added perk, lenders are then able to extend unique bargains and benefits to borrowers, and that is why FHA loan products may be the best available option for anyone wanting to buy or refinance a home in 2009.
FHA loans fell out of favor during the last real estate boom, because mortgage companies were offering other irresistible deals. Lenders pushed no-money down loans, sub primes with ridiculously low interest rates, and mortgage refinances that allowed borrowers to finance as much as 125 percent of the value of their property. Of course those easy money products backfired, triggering the worst loan crisis in history. Now that people have come back down to earth and are seeking solid and predictable loans instead of exotic and incomprehensible ones, FHA loans are becoming some of the most popular mortgages of all. Between 2003 and 2006, the FHA was involved in less than four percent of home loans. But this year it is predicted that the FHA will back as many as 25 percent of America's mortgages.
Also, until recently, FHA loan limits were capped so low that they were not able to help anyone trying to buy a slightly more expensive home. But now the FHA is authorized to insure mortgages of up to $625,500, which means that almost anyone can rely on an FHA loan to make their purchase.
FHA-insured loans offer many benefits including:
· Low Cost: The FHA has always offered competitive interest rates on dependable products including 30-year fixed rate loans and sensibly structured adjustable rate mortgages.
· Smaller Down Payments: With an FHA loan it is possible to buy a house with as little as three percent down. The funds can even be a gift from a family member such as a generous parent.
· Less Stringent Regarding Credit: Even for those who do not have a perfect credit history and high credit score, it is still possible to get approved for an FHA-insured mortgage. In most cases, for instance, it is easier to get an FHA-insured loan than a conventional loan after a bankruptcy.
The FHA is also one of the most innovative lenders when it comes to keeping borrowers in their homes. As the rate of foreclosures has increased, so have programs to rework loans or do creative refinancing to help homeowners manage monthly mortgage payments and avoid problems.
Another huge advantage with the FHA is that they offer loans designed especially for people who want to buy and then improve a home. The so-called FHA 203(k) loan program lets buyer's borrow enough to buy the home, plus have extra money to do immediate repairs. There is no need for a second mortgage, because the funds are all rolled into a single home loan. They even offer an "express lane" version of the loan that is streamlined to make it easier to apply and get the funds faster.
To find mortgage and real estate professionals committed to exceptional service to the GLBT community, visit www.GayRealEstate.com and www.GayMortgageLoans.com. Or call their toll Free phone number 1-888-420-MOVE (6683).
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