Student Loans For Bad Credit And No Cosigner

     Today the FHA mortgage program remains an important option — more than 555,000 FHA loans were originated in 2005. That’s a big number, but it’s a lot less that the 827,000 FHA loans started in 2004 or the 1.53 million originated in 2003.

     Whatever the numbers, if you’re a first-time buyer or someone looking for liberal qualification standards, the FHA program is worth considering. And given coming changes in the lending industry, it’s likely that we’ll see a lot more FHA home loans in 2006 and beyond.

     Under the FHA program you can buy with as little as 3 percent down. That’s 97-percent financing, a good deal by traditional standards though it’s fair to point out that 100-percent financing is now widely available. However, the 3-percent down payment can be in the form of a gift or grant — in fact for the past decade the FHA has even allowed couples to establish a “bridal registry” where friends and relatives can contribute to a down payment fund.

     In addition, the FHA program also allows owners to kick-in a “seller contribution” of 1 percent to as much as 6 percent of the sale amount. While you can bet that most sellers will not joyously give up money to help purchasers, in a buyer’s market a seller’s contribution might be the difference between “sold” and stilled listed.

     To qualify for a mortgage lenders look at your monthly income and expenses. For a conventional loan the guidelines might allow you to spend 28 percent of your gross monthly income on housing costs such as mortgage interest, principal, property taxes and home insurance (PITI). In addition, loan guidelines might allow you to spend 36 percent on PITI plus other monthly debts such as credit card bills and auto loan payments.

     With FHA fixed-rate financing the usual ratios are 31/43 — liberal standards that will allow borrowers to get more financing than with conventional loans. FHA also offers an “energy efficient mortgage” or EEM. If you have an energy-efficient home the FHA believes you’ll have lower utility costs so there’s more money in the till each month for mortgage payments. The FHA guidelines allow for 33/45 ratios with EEM financing. Read the rest of this entry »

     Q:What is the definition of FHA Loan?

     A:The Federal Housing Authority (FHA) was created in 1934 to help potential homeowners gain access to money to boost homeownership rates throughout the United States. FHA loan programs require very little money down on a new purchase (usually only 3% of the purchase price) and will lend up to 95% of the value of a home on a cash out refinance. This high loan-to-value ratio is the primary appeal of an FHA transaction.

     Content:

     The FHA is not a lender and does not actually make or guarantee home loans. They insure the loans an online mortgage lender can assist you in obtaining.

     FHA currently only offers three loan programs:

     30 year fixed

     15 year fixed

     5 year fixed ARM

     FHA Mortgage Insurance Premiums (MIP)

     Every FHA loan requires Mortgage Insurance Premiums (MIP) regardless of the down payment amount or loan to value. In addition, FHA loans require Up-front Mortgage Insurance Premiums (UFMIP). The UFMIP can be financed into the loan.

     Up-front Mortgage Insurance Premium (UFMIP)

     UFMIP is calculated at 1.50% of the base loan amount on all loans, regardless of the down payment amount. This insurance protects the lender against losses in the event that the borrower defaults on the loan. Read the rest of this entry »