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The Best Fha Home Loans
By Jeffrey S. Ragan, Thu Dec 8th
b>FINDING THE BEST FHA HOME LOANS For many, finding the best FHA home loan should not be aproblem. Although there's a number of different kinds of FHAhomes loans, in this article we'll talk about just 2 of them.For most first time home buyers this will suffice. The first will be the FHA 203b home loan. Now if you're intotechnical stuff and want some good bedtime reading go ahead andget a copy of the Department of Housing and Urban Developments(HUD) handbook 4155.1 REV.4.
It'll surely bore you to death but at least you'll see where I'mcoming from when sharing this information with you. The reason we'll talk about the 203b is most likely, this is thebest FHA home loan and used most often. THE BEST FHA HOME LOANS (203b) EXPLAINED So what does 203b stand for? That is the section number underwhich the underwriting guidelines can be found in the NationalHousing Act. The main thing for the first time home buyer to know is thistype of loan program is a great way to start down the path ofhomeownership. The US Government has this loan program in place to buildstronger communities and to help people become homeowners. Alsoit aids the US economy. Think about that for just a moment. Themore homeowners in a neighborhood, the stronger a communitybecomes. Homeowners have pride of ownership and take good careof their properties. To qualify for this type of FHA loan is really quite simple.There are certain credit requirements, income and other thingsto consider. For the most part, this is best way to get started. Many mortgage people might try to steer you away from this kindof loan product. Do your homework. Take it from me; this is notnearly as hard as people make it out to be. For many Loan Officers, they just do not know how FHA loans workor just resist the extra efforts involved helping you to becomequalified. If you meet with resistance when asking for information on FHA203b home loans, move on. Find someone you trust and that hasknowledge of the product. There is much more to this loan product. If you want to learnmore about how this can help you visit the HUD website. MY FIRST HOME LOAN WAS A 203b If you recall, when I was telling you my experience on the homepage of my website, my first home was purchased under an FHA203b home loan. Now, I didn't know that at the time because allI was looking at is the $570.00 down payment. FHA 203b loans require a 3% down payment. In my case, thepurchase price was $19,000.00 so my 3% down payment equaled$570.00. So all I could think about was that I was going tobecome a homeowner for a small amount of money. In fact it wasequal to about 2 months rent for me. Now this was back in 1978so homes are a little costlier now of course. Yet still today, first time home buyers are getting into FHAloans with $3,000.00 or more. I strongly feel if you have
$3,000- $5,000 your dream of home ownership could be just 30 days away. THE BEST FHA HOME LOANS (203k) EXPLAINED The other FHA loan is called the 203k. This loan product is usedfar less often since it requires more for you to qualify. The way this loan product works is it allows you to both buy andrepair a home with borrowed money. Again, the same 3% downpayment requirement applies. Where this is different, you can buy a house in need of repairs.The total repairs must equal at least $5,000.00. Like the 203bhome loan you must plan to live in the property as your primarydwelling. So you get to add the cost of repairs on top of the purchaseprice of the home. A HUD licensed Consultant will meet with you at the property tocomplete a Work Write-Up of the repairs to be made on the house. There will be mandatory repairs which will bring the home up toHUD's minimum standards. Also there'll be some recommendedrepairs the borrower would like. You can act as your own general contractor, take estimates anduse these to determine costs or you can hire the work out to alicensed professional. The HUD licensed Consultant will need to be paid for thisservice up front before closing on your loan. This fee isnormally somewhere from $400-$1,000 dollars. The repairs must begin within 30 days of closing on the loan andshould not have any delays longer than 30 days otherwise yourloan may be called in to be paid in full. The money for repairs is held in escrow until the work iscompleted. You can take 5 draws during the construction process. The real downside to this kind of a loan, if you plan to do yourown work, you must have sufficient funds to make repairs beforetaking a draw. In other words, you get reimbursed for completedwork only. So you will have bought and installed the materialsbefore getting paid. You do not get paid for your labor. Although when you begin, youuse the estimates for both labor and materials to determine youroverall loan amount. So in a sense, you sort of get paid forlabor. Many use these excess funds to make additionalimprovements on the house. So then really, one of the best FHA home loans is the 203btalked about just above. If using the 203k loan, most people use a contractor since heuses his own money to make the repairs and takes draws as needed. Like the 203b loan, there's more to this loan product as well.To find out more on the best FHA home loans visit the HUDwebsite or request my FREE 14pg Guide "10 Critical Stepsfor First Time Home Buyers" at my website. About the author:Jeff Ragan is a senior loan officer interested in helping peopleunderstand the mortgage process. Too many people have been taken advantage of by unscrupulousloan officers. His website has dozens of informative pages tohelp FIRST TIME HOME BUYERS save time, money and mistakes.Feel free to visit his website to learn more.
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