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Purchasing your first home can be a daunting task for many first time homebuyers. Many individuals do not have the best credit and finding a home loan that wont kill your paycheck can be a hard task. Others are concerned about the up front costs that come with purchasing a home including money down, closing costs, taxes, etc.

FHA is a solution to many of these questions and doubts.

Today’s FHA terms are pretty straightforward. In fact, in many markets the rates and terms are better than those for conventional 80% / 20% down payment loans.

There is little or no adjustment to the interest rate for an FHA loan, as the rates vary within .125 percent of a conventional loan. (like stated earlier right now are lower due to market conditions)

Normal subprime lenders have employed much higher interest rates in order to compensate for the increased risk of the loan. Because FHA loans are guaranteed, there is substantially less risk for the lender and therefore interest rates are lower

Mortgage insurance is funded into the loan, meaning a premium of 1.5% is added to the loan balance instead of being paid out-of-pocket. In addition, a small portion for the mortgage insurance premium is added to the monthly payment, but it is far less than private mortgage insurance premiums.
Borrowers can finance 97% of the purchase price and put down 3 percent. In some instances, when using the down payment assistance programs that supplement FHA, the down payment can be zero.
Allowable debt ratios are higher than the debt-ratio limits imposed for conventional loans.

Stop renting today and purchase your first new home. Why pay for someone else to build equity when you can jump on lower FHA loan rates and build your own wealth? Don’t be intimidated by the thoughts of upfront costs and take that first step to purchasing your first home. It may not be a brand new house but it’s always nice to have a roof over your head that you can say belongs to you.

Amongst the spectrum of people in real estate, there are investors. They look for good deals, try to flip  the house, and sell it for a profit. Right now with Indymac bank going under and releasing 3,800 of its 7,200 employees and completely stopping it’s lending to investors (see article in Wall Street Journal) It is getting harder for everyone INCLUDING investors to get a mortgage.

The thing with investors is that most of their income comes from flipping houses. They really need those stated income – verified asset kind of loans and they are dissappearing. Luckily there are a few good people out there mostly who specialize in loans for investors. They are not the most lucrative, with high closing costs but they are still getting the job done.