Home Buyer Home Loans | Sacramento Real Estate Voice

Move Over, FHA is BACK in Town

April 24th, 2008 categories: Mortgage, Sacramento

Home Buyers, this is your lucky day! Guess whos back in town?

Before I tell you lets talk about how uncertain loans have been. Thats an understatement if there ever was one.

So many of the homes today that are in foreclosure are due to poor loans and bad spending habits by homeowners.

But, now FHA is back in town! We are seeing the return of FHA loans and for good reason.

FHA will see Real Estate back on its feet with safety for the home buyer.

There is a conforming loan rate increase. Different areas have different loan limits. Sacramento Real Estate has changed from $464,000 to $580,000. This means that you, the home buyer can finance up to $580,000 without having a jumbo loan.

And why do you want to avoid a jumbo loan? Because the interest rates are higher on a jumbo loan. This is only good until December 31, 2008.

Sacramento County, Placer County, El Dorado County and Yolo County all have the same conforming mortgage loan rate with FHA, $580,000.

The other reason FHA is doing so well is that there are lower down payment requirements. Other loan programs such as a conventional loans now require 10% down payment in order to purchase a house or condo. FHA on the other hand only requires 3% down payment.

This doesnt mean that everyone will qualify for an FHA loan. Twelve months of a good payment history is required. You need to be prequalified by a reputable Lender. It is in your best interest to meet with your Lender before ever looking at homes. Your Mortgage Lender will check your credit and verify your employment. This is the time to ask your Lender what your payment would be for the amount you qualify.

I can’t tell you how many times a new home buyer will come to me who already has a Lender but has no idea what their payments would be on any particular loan amount. This is essential. Home buyers need to know what their loan payment would be for several differnent real estate loan amounts.

If you dont feel comfortable with the loan payment each month, then ask what the payment would be for a lesser amount. You dont want to be house poor, but at the same time you want to be able to get as much house as you feel comfortable buying.

Your lender will send the qualification letter to the Realtor so that your Realtor will know which homes based on the home loan you are obtaining, you would qualify for. Once you have decided on which house to make an offer, the Lender letter will go with the purchase contract.

You are asking the Seller to take their home off the market so it is essential that you provide a letter from the Lender indicating that you are qualified for that amount of money to buy the house. Gifts for down payment and closing costs are allowed. No minimum FICO score or credit score requirements and FHA will allow a home purchase two years after bankruptcy and 3 years after a foreclosure.

There are times when through negotiations, the seller will actually pay for the home buyers 3% down payment. There are also down payment assistance programs available through Nehemiah and others.

Since many of the homes in the Sacramento region are bank owned and some in need of repair, FHA has a program that allows owner-occupied borrowers to finance up to $35,000 in the mortgage to make repairs. For a list of requirements that the property must have be sure to check out the Homeownership Center Reference Guide.

Welcome back to the FHA backed mortgage loans. Back in the day, FHA was the only loan in town to trust. Glad to see FHA returning.

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If you are thinking of relocating as a home buyer or simply considering selling your house, be sure to check a FREE Sacramento MLS of homes for sale and condos for sale.

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This entry was posted on Thursday, April 24th, 2008 at 6:00 am and is filed under Mortgage, Sacramento. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Esko said at April 24th, 2008 at 6:54 pm
Gena,

One of the key steps for a would-be homeowner while house shopping is the pre-approval process with a reputable mortgage lender. Once granted, it helps everyone involved, the seller, the buyer and the real estate agent.
Gena Riede said at April 25th, 2008 at 7:57 am
Esko, absolutely. It’s amazing how many home buyers start looking for a house before that first step with a reputable Lender is initiated.

In this day and age especially with loan programs coming and going as well as being revamped, it is an essential first step.

Thanks for popping in.

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Move Over, FHA is BACK in Town

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