Now that home prices have leveled in many parts of the country, many first time homebuyers are looking for creative ways to move into the home of their dreams.It has become a little easier to purchase a home because of the Federal Housing Administration, or FHA.This allowed many first time homebuyers to take advantage of the $8,000 tax credit that expires at the end of the year.How does FHA make home buying so attractive?

For starters, you can finance a new home with very little down.   3.5% of the purchase price to be exact.   Unlike a conventional loan which requires at least 10% down with exceptional credit, first time homebuyers can get the keys to a new home with just 3.5% down, and it doesn’t even have to be your own money.   The money can be gifted to you by a family member.For years conventional loans have been the most popular option for first time homebuyers.Most lenders were doing 100% financing in the past, and many first time homebuyers took advantage.   Now, expect to pay anywhere from 10 to 20 percent down to get a conventional loan, and above 80% is going to require Private Mortgage Insurance.

FHA also allows first time home buyers the opportunity to purchase when conventional lenders issue a denial.   Because FHA loans are insured by the Federal Government, the loans are a bit more leniant on credit standards.Most conventional lenders will require a 680 Fico score.    For a FHA purchase, the minimum credit score required by most lenders is 620.   Although some lenders will work with scores down to 580, expect your lender to require a middle score of 620 before you are issued a pre-appvoal letter.

FHA is a very strong option for purchases.   Although 3.5% is required for a down payment, 100% of the down payment can be gifted.This means you can have your down payment gifted by a family member, and own your home putting any of your own money down.   

Up to 6% of the purchase price can be in the form a seller concession.   Conventional loans limit the seller credit to 3%, while you can go as high as 6% through FHA.This money can cover closing costs or any prepaid items such as setting up an escrow account for taxes and insurance.A popular option is the 2-1 buydown feature to take advantage of the seller credit.By using this seller concession, buyers can get an interest rate 2% below the normal rate.   

You can also expect the appraisal process to be a little smoother with FHA compared to a conventional appraisal.    With a conventional loan, lenders are required to order an appraisal through a panel, a process known as the Home Valuation Code of Conduct.

FHA has been around since 1934, and now represents almost 50% of the purchase market.FHA is growing in popularity among first time home buyers.    To find out more about how to qualify for an FHA home loan, visit http://www.timmarose.com

Now that home prices have leveled in many parts of the country, many first time homebuyers are looking for creative ways to move into the home of their dreams.   FHA, the Federal Housing Administration, is making it easier for many to purchase with low down payment requirements.This allowed many first time homebuyers to take advantage of the $8,000 tax credit that expires at the end of the year.How does FHA make home buying so attractive?

For starters, you can finance a new home with very little down.   3.Exactly 3.5% of the purchase price.   Unlike a conventional loan which requires at least 10% down with exceptional credit, first time homebuyers can get the keys to a new home with just 3.with 3.5% down, and it does not have to be your money.The money can be given to home buyers by a family member.For years conventional loans have been the most popular option for first time homebuyers.First time homebuyers took advantage of 100% financing and many utilized 80/20 loans.   Now, expect to pay anywhere from 10 to 20 percent down to get a conventional loan, and above 80% is going to require Private Mortgage Insurance.

FHA also allows first time home buyers the opportunity to purchase when conventional lenders issue a denial.FHA loans are insured by the government, and the credit requirements are more relaxed than conventional loans.Most conventional lenders are going to require a 680 middle credit score, in addition to great credit.FHA purchases will require a minimum credit score of 620.A 620 Credit score will be required by most lenders but some select lenders can go as low as 580.

FHA is a very strong option for purchases.   Although 3.100% of the 3.5% down payment requirement can be gifted.   What this means is that you can have your down payment gifted from a family member, and walk into your home without having to put any of your own money down.   

Up to 6% of the purchase price can be in the form a seller concession.   Conventional loans limit the seller credit to 3%, while you can go as high as 6% through FHA.   This money can be used to cover closing costs, prepaid items, or you can use the money to buy the rate down.The 2-1 buydown is a great way for first time homebuyers to take advantage of the seller concession.By using this seller concession, buyers can get an interest rate 2% below the normal rate.   

You can also expect the appraisal process to be a little smoother with FHA compared to a conventional appraisal.FHA loans do not require that the appraisal be ordered through the newly formed home valuation code of conduct (HVCC) which has slowed the process down significantly.

FHA has been around since 1934, and now represents almost 50% of the purchase market.FHA has been growing in popularity among the first time home buying market.    To find out more about how to qualify for an FHA home loan, visit http://www.timmarose.com

The Hope 4 Homeowners (H4H) program is aimed at helping homeowners that have found themselves owing more on their mortgage than their home is worth. This program can actually reduce the amount that a homeowner owes on their mortgage which leads to a lower monthly mortgage payment.

The Details?

The H4H loan is based on the current value of the home for the purposes of refinancing. A Hope 4 Homeowners’ loan will be 90% of the current value of the home. Having the balance forgiven may have some negative aspects. The Federal Housing Administration (FHA) and your current lender will share in any profits of the house when the homeowner sells their home. This offsets the balance that has been forgiven. {The reduced loan amount results in a lower montly payment}.

Brief Summary:

Let’s say that your current mortgage balance is $400,000 and your home is now worth $250,000. There are millions of homeowners that find themselves in this scenario. You are currently making a mortgage payment on a loan that is much greater than the value of your home. The Hope to Homeowners program will finance a new loan based on 90% of the home value today. This example results in a loan amount of $225,000. That is a reduction of $175,000 in the principal balance of your mortgage. The new mortgage payment will be based on this new loan amount of $175,000.

Will the Payment be Reduced?

The principal reduction of your mortgage is not the only benefit to this program. The Hope to Homeowners loan payment will also be reduced. Let’s say the current mortgage is $400,000 at 6% on a 30 year fixed (the benefits are even greater if you are in an adjustable rate mortgage). The current payment is $2,398. Let’s just assume that the Hope 4 Homeowners loan has the same interest rate as the current mortgage (all H4H mortgages are 30 year fixed). The H4H payment is $1,348. That is $1,050 in monthly savings. The benefits are substantial.

There are some qualifying factors that homeowners need to understand. Now that you understand the benefits of the Hope 4 Homeowners program it is time to do a bit more research and find out if you can qualify for this program. Keep in mind that there are some negative aspects of this loan. You may give up some of the equity that your home builds when you sell your home. This program will however help many Americans keep their homes. The H4H program can and will provide some much needed hope to homeowners that are upside down on their mortgage.

This company can help you find out more. Hope for Homeowners