FHA Mortgage Loans – The Truth about FHA Mortgage Loans as well of some FHA Loan myths
If you’re looking into applying for an FHA mortgage loan, there are some things you really should know first. This article explains the pros and cons to FHA mortgage loans and expels some of the common myths involved.
For low-income and bad credit borrowers, the FHA’s mortgage loan program can sound like a dream come true. Many borrowers have heard that the FHA won’t look at your credit, needs less money down, and approves applicants that other banks won’t. What are the facts and what are the myths? Read on to find out.
Fact or Myth #1 – The Government Loans Money
The first common myth of FHA loans is that the US government’s Federal Assistance Mortgage (FHA) program actually loans out money. This isn’t the case.
An FHA loan is simply a bank/credit union loan that is backed by a guarantee from the government. If you fail to pay the mortgage, the government guarantees that they will repay the bank instead.
Because of this guarantee, the bank’s lending requirements are much looser, because they’re taking less risk.
Fact or Myth #2 – Your Credit Doesn’t Matter
This is a half myth, half truth. While the FHA won’t base your loan on your FICO score, your credit history is still important.
What the FHA is looking for is a solid history of at least 12 months, where the borrower has made all his payments on time. Instead of looking at just your credit report, the FHA may also look at your phone bills, rent history, utilities, among other bills to demonstrate your credit worthiness.
You also get the chance to demonstrate why you may have a bad credit score. For example, if you have an outstanding history of making on-time payments up until a medical emergency, and since then still managed to pay your consumer debts, you may still qualify for an FHA loan.
Fact or Myth #3 – An FHA Loan is a Better Deal
While it’s true that an FHA loan entails less risk for banking institutions and therefore they can charge less, an FHA loan may not always be a better deal.
The FHA is designed to be a self-sustaining institution, and therefore has to make money as well, in the form of insurance paid to the FHA.
For low income or bad credit borrowers, FHA backed loans are almost always the better deal. For medium income or average credit, research and comparison is necessary to be sure whether FHA is for you or not.
To learn much more about FHA Home Mortgage Loans or to see about getting a Home Mortgage Loan Quote, visit us at http://www.gethomemortgageloan.com/
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Real Estate – FHA 203K Full Rehab Loan-Minnesota Mortgage
We have sourced and found an investor who will fund an FHA FULL rehab loan. This loan is a little more complex than the 203K streamline or "lite" product that is limited to 35K.
FHA 203K Mortgage is not always the best answer!
I often get asked about the FHA 203K mortgage. Working for Summit Mortgage it is a product we offer. However, the FHA 203K loan only works for a small group of people.
Our team has great solutions for investors and people who do not meet the FHA guidelines.
Recently, I have been working with more and more investors that have tried to buy “Fixer Uppers” and just haven’t had luck finding the mortgage finance to take advantage of the great deals available.
I wish I could get our information out to everyone who needs help. We have the Purchase Rehab Sell mortgage solution, the Purchase Rehab Rent mortgage solution and can help facilitate investors to convert their IRA, 401K and other retirement investments into a Self Directed IRA they can use to invest in real estate.
If you, a client or investor you know needs help please feel free to contact our team about all of the mortgage and finance options available.
Dax Dickson
952-285-9992
Minneapolis & St Paul, MN Metro area!!
The key to repairing bad credit is to write a properly formatted letter of dispute to one or all of the credit bureaus and send them out via registered mail.