An Insight Into Fha Mortgage
If you are looking for a Federal Housing Administration or FHA mortgage
, you should probably find out more about the types of mortgages available. While many people have heard of the 30-year fixed rate
FHA
mortgage, many may not know that there are other types of FHA loans available too. The FHA is a federal government agency and it provides insurance for a selection of loan programs to allow a greater number of Americans to own or refinance a home of their own. The FHA loan programs are all insured by the government and the programs are made to fit your needs.
Before you take the 30-year fixed rate FHA loan program, you could take a look at the other types of FHA loans available. The fixed rate loan means it comes with a fixed interest rate and you pay the same amount for the entire term of the loan. FHA also offers Adjustable Rate Mortgages or ARM. The FHA ARM is a Department of Housing and Development (HUD) mortgage that is custom-made for low and moderate-income families who are looking at purchasing their own homes. The program, which can be used in conjunction with other FHA programs, will be able to keep the initial interest rates low and the monthly mortgage repayments at a minimum. This program, which is also referred as Section 251, insures home purchases or loan refinances with interest rates that may increase or decrease over time. This program is recommended for families who want to buy a slightly more expensive home and cannot afford the interest rate now but is expecting their incomes to increase in the coming years. It is also suitable for those who do not plan to stay at the purchased property for a long period.
Other than the FHA ARM, there is also a Rehabilitation Loan for those who are purchasing distressed property. This loan will cover the mortgage to purchase the property and also the repair costs of the said property. However, according to the
FHA requirements, you may need to include a detailed proposal to list out the repair works required and an estimated cost of the repair. Then, there are also loans for homes on Indian Reservations and other restricted land. Indian tribe members may apply for a special loan for homes on tribal land and the applicants must show proof of a land lease from the tribe.
You can also look at refinancing with
FHA loans. When you refinance with an FHA loan, it could be a great and effective way to put the home equity to work. However, this sort of refinancing is probably only for homeowners who are using their home as their principal residence. There are two types of refinancing programs you can check out. The first one is a FHA cash-out refinance. This program is meant for those whose property has increased in value. This program will allow homeowners to refinance their existing mortgage by taking another mortgage of a higher amount than they currently owe. The second one is the FHA streamline refinance which will allow homeowners to reduce the interest rate on their current home loan. This program also has less paperwork. So approvals may be faster and thus, sav you time and money. Whichever program that you finally sign up for, the most important factor maybe, is to look for one that suits your needs the most. Your financial situation could be different from others. So it may not wise to just go for the most popular program. You may want to check out your financial situation first and then find a program that will help you improve your finances or help you get your first home without putting you in huge debts.
by: Ask Bill
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