Ever heard the saying - have your cake and eat it too? Well, when it comes to getting a home mortgage while not having much money to pay upfront, it is quite possible to achieve this. Want to know how to do this?
First, if you are a first time home buyer, here is some good news. There are several loan schemes that are backed up or financed by the Federal Housing Administration or FHA that provide for loans with low down payments and low closing costs while allowing you to qualify for easy credit. The FHA functions under the US Department of Housing and Urban Development and one of its main tasks is to help people become homeowners.
Normally, banks and lenders require that you pay anywhere between ten percent and twenty five percent of the property cost to be paid up front as down-payment costs. Now, if you qualify for an FHA mortgage insurance program your down payment could be as low as just three and a half percent of the total cost of the property. So, how does this work?
First of all, you should be a first time home buyer. You should be eligible for FHA mortgage insurance and should meet FHA credit qualifications which are quite standard. You should be capable of financing the upfront mortgage insurance premium into a mortgage and also must demonstrate the ability to pay the annual premium for the insurance.
Next, the property that you plan to purchase should only be a one to four room structure. FHA specifies other eligibility criteria which is specific to your area or the area where your property is situated. It is good to consider all of them before making your decide to apply for a mortgage.
A very heartening part of this whole program is that the mortgage loan covers most of your closing fees and costs associated with securing the home for you. FHA even allows these costs and expenses to be added on to your final loan amount and repaid at the rate of interest.
Now, the benefits do not stop here. Besides allowing you to buy a home, FHA programs allow for buying a home and fixing it up to your requirements and all of this is included in just one loan. One primary condition is that you should be occupying the home by yourself after buying and fixing it up. These loans are provided by the FHA across the United States through mortgage lenders that are pre-approved by them.
If you already own a home and want to undertake some repairs and remodeling and do not have the money for it, the FHA does help you consolidate these costs in your existing loan or provides for your availing a new loan without having to make large down payments. Standard conditions and procedures such as feasibility studies, approved quotations and other formalities apply. Also available are reverse mortgages for senior citizens who own their house or have a low balance on their loan accounts.
All in all, this is a very useful program for those who do not have much money and still wish to get a mortgage for a home.