Tuesday, 24 February 2015

You Can Get Lower Interest Rates with Friendlier Term Limits

Yes, you read it right. It is possible to get lower rates and friendlier terms. You have been running from pillar to post to get that loan which will enable you to buy your dream house. You have learned that buying property comes with a lot of other costs which include appraisals, title expenses, and credit reports, not just the price of a house. Just when you are about to give up what seems an unequal struggle given the challenging economic situation, you get information which seems like manna from heaven.

Safeguarding High Risk Loans

This news is about how you can apply for FHA mortgage in Irvine or any other geographic area within the United States of America. When you look for getting a loan from the Federal Housing Administration (FHA), keep in mind that this is a branch of the Department of Housing and Urban Development which has been working to insure loans to homebuyers. The advantage of getting a loan from the FHA is that the mortgage is covered by insurance which safeguards the lender’s capital and enables you to negotiate for the house you have set your heart on. This in turn allows you to make a smaller down payment than you would have to make for a conventional loan.

How Does It Work?

The housing market is hit the hardest during any kind of economic downturn or recession. The FHA was set up to stimulate the realty industry and encourage buyers to invest in new homes. If the debtor falls behind on the mortgage and the property has to go into foreclosure, then the FHA pays off part of the mortgage through its mortgage insurance program. Subsequently the property defaults to the FHA. Since the option for refinance was added to FHA mortgage in Los Angeles and other places, the FHA has been able to bailout quite a few homes from foreclosure. It is the only mortgage relief program that actually caters to people who already face foreclosure. 

The qualification process is based on certain key criteria such as your monthly mortgage payment exceeding 31% of your gross monthly income and a hardship letter which indicates it if your income has suddenly fallen or your social responsibilities have increased your financial burden. The great news is that while most lenders are tightening their purse strings and making it close to impossible to get a loan, the FHA lenders are still trying to make it reasonable for anyone to get one.  

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