Few years ago, it was unlikely to get a home buyer using an FHA loan. You could have got a loan with no down payment and no income verification. Now these days, Government insured-FHA loans are the only programs available for buyers with as low as 3.5% down payment. Most home buyers don’t have 20% or more saved up for down payment so in that case, FHA loan is the only way to finance the home purchase. And of course, thanks to Uncle Sam, home buyers can borrow up to $729,750 in high end markets such as Los Angeles.
Qualification – It was a common misconception that FHA loans would only be suitable for low income borrowers. As a matter of fact, there is no limit on your income. In order to qualify for FHA loan or any loan for that matter, lenders would evaluate your ability to pay the monthly mortgage. Borrowers must provide tax returns, paystubs and other income documentation to show their abilities to pay their monthly mortgage.
Rates & Costs- Rates are very similar to conventional loans. I personally have a FHA buyer that locked his rate at 5% for 30 year fixed with no lender fee. However, borrowers are responsible to pay a 1.75% upfront charge as well as a 0.5% annual insurance premium for five years and until the principal balance hits 78% of the sales price or the home’s appraised value.
Home Appraisal – These days, Appraisers have been very conservative in their valuations. A lot of buyers have been un-successful in obtaining financing due to low valuation. On top of the valuation, FHA-approved appraisers grade the health and safety issues of the home and sellers are required to fix any issue before close of escrow. That’s one of the reasons that a lot of sellers and agents don’t like to work with FHA buyers.
FHAs were once very difficult loans to get. But now it has a simpler process and only takes few days longer than conventional mortgage. It’s a great financing option to consider for those who don’t have 20% or more saved up for down payment or don’t have 700+ fico scores. Platinum Capital Realty offers its buyers up to 50% cash rebate on the commission we earn by representing our buyers. You can use the cash rebate for closing costs or to purchase new furniture. For more information please visit www.900flat.com
About Platinum Capital Realty:
Platinum Capital Realty is a full service discount real estate brokerage firm, providing property buyers and sellers with high quality service and value at fraction of the cost. The company lists and sells commercial and residential properties with $900 flat fee and 0.5% of sales price at closing. The company’s website provides buyers with free access to MLS-listed properties through most of Southern California as well as foreclosure and short sale properties. Platinum Capital Realty offers its buyers up to 50% cash rebate. For more information on Platinum Capital Realty, visit http://www.900flat.com/ or call 877-900-FLAT.
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Tags: Annual Insurance, Appraisers, Common Misconception, Conventional Loans, Conventional Mortgage, Course Thanks, FHA Loan, Fha Loans, Financing Option, Home Appraisal, Income Borrowers, Income Documentation, Income Verification, Insurance Premium, Matter Of Fact, Mortgage Borrowers, Mortgage Rates, Principal Balance, Safety Issues, Valuations