What Is The FHA?
FHA stands for federal housing administration. It was originally set up as part of the National Housing Act of 1934. Historically it was set up because of the great depression. Its original goals were to provide financing, improve housing conditions and create a more stable mortgage market. There is a loan known as a FHA loan which is very popular with first time home buyers as well as buyers who do not have 10-20% down payment. It is also available to those who have a lower credit score. Be sure to check with your lender on what credit score they require. FHA homes are acquired using these loans and they can be used to buy condos, town houses, housing units and single family homes. There are also several different FHA loan products like adjustable rate...
Read MoreWhat Exactly Is Mortgage Insurance?
The definition of mortgage insurance (also known as mortgage guarantee or PMI) is “an insurance policy which compensates lenders or investors for losses due to the default of a mortgage loan. Mortgage insurance can be either public or private depending upon the insurer.” Many people confuse PMI with homeowner’s insurance. These are actually very different! Homeowner’s insurance insures the property: dwelling, personal property, other structures on the property, etc. Mortgage insurance still offers protection, but not to you or your home….it’s for the bank who made the loan on your purchase. In essence, mortgage insurance protects the bank from loss in case you, the new borrower, fails to make your payments, and the...
Read MoreWhat Exactly Is A Real Estate Appraisal?
Most people know that an appraisal is part of the home buying process. Do you actually know what the appraisal consist of? The official definition of an appraisal is “the process of valuing real property. The value usually sought is the property’s Market Value. Appraisals are needed because real estate transactions occur very infrequently. Not only that, but every property is different from the next, a factor that doesn’t affect assets like corporate stock. The appraiser usually provides a written report on this value to his or her client. These reports are used as the basis for mortgage loans, for settling estates and divorces, for tax matters, and so on. Sometimes the appraisal report is used by both parties to set the sale price of...
Read MoreOptions For A Low Down Payment On An Indiana Home
Many people who have reasonable, steady incomes hold off on the dream of owning a home because they are afraid they can’t come up with the down payment. Fortunately, there are still mortgage options for those with limited cash reserves. One of the biggest misconceptions in the post-housing bubble era is that you need to put 20 percent down to get a mortgage. While credit has become much tighter and no-money down loans have virtually disappeared from the mortgage market, it’s still quite possible to get a mortgage for 5 percent down or less. Here are some options for buying a home with a relatively small down payment: 1. Conventional Mortgage Technically, Fannie Mae and Freddie Mac will still allow mortgages with as little as 5 percent down. However,...
Read MoreAm I eligible for a USDA Approved Steak? What About a USDA Loan?
A steak? Yes! A loan… perhaps. Most people associate USDA with food. You may recognize these 4 letters from the labeling on the meat and veggies you purchase for your family. This is one facet of the USDA. It also pertains to housing. If you qualify, you can purchase a home with little to no money down! USDA loans are offered by the USDA, and they allow you to purchase, refinance, renovate, repair or even relocate a home. The program hasn’t been around forever, though. It began in 1991 in an effort to boost home ownership in rural areas. Unlike conventional mortgages, there’s no down payment required – the loan can even cover closing costs, if the seller doesn’t. The most common reason that people do not pursue home ownership is coming up with...
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