Supporting the American Dream – FHA Housing Loans

The American dream includes owning one’s very own home. Everyone or almost everyone wants to achieve that American dream. But the fact is that those without enough earnings as well as those who do not have perfect credit and savings find it difficult to get the housing mortgage loans that will enable them to fulfill their dream of getting their own home. For these people, the FHA housing loans program offers the much-needed helping hand.

What exactly is this? The FHA or the federal housing administration gives out loans that are insured by federal funding. The FHA issues several private lenders and banks the ability to give FHA loans. By ensuring the loans, they make sure that the banks and lenders will be able to lower the risk measures that they take in fear of the borrower defaulting. There are a lot of private lenders that offer these. All that one needs to do is to look for a lender who offers the best deal.

One can use FHA housing loans for so many reasons. These loans are perfect for: those who want or need to buy a house for yourself or for you family of four people, those who want to buy a factory built house or the so called mobile homes, those who need to buy a house that is a “fixer – upper,” and even for those people who already have a home mortgage but wants to lower their payments. In that last case, the borrower with their own home will need to refinance through the FHA. This could also help them cover costs of making the house energy efficient or of fixing something.

The FHA program has almost any kind of loan to fit almost any kind of ownership or financial situation. The best thing about it is that it so very accessible to anyone even if they do not have blemish free credit. This is particularly important at this time of economic crisis when almost everyone has some financial crisis.

It is a wise decision though for one to check out exactly if a lender’s FHA loan package fits one’s financial circumstance perfectly. Since these loans are made available even to people who have low credit scores and since these loans do not require high down payment amounts, there are also some stipulations and limitations as to the amount one can borrow depending on the area or region.

No matter what your financial circumstances are, there is just one important thing that you have to remember. Do not give up hope. A lot of people who are fighting what seem an impossible battle to stop foreclosure of their old beloved home may feel too overwhelmed to continue fighting on. In this case, they might just simply wait for things to unfold and let fate decide things. Waiting is a bad idea. One must act quickly. The FHA housing loans offerings are a perfect tool for people in bad financial situations so one must grab it as early as possible.

Bootstrap and Handle Your Housing Loan Properly This Season

With the holiday season around, it is difficult to enjoy if you have your home loan payment issues lingering at the back of your brain. Worst yet is if you have an impending foreclosure on your house. Focus on what you can do to stop this problem from happening so you can enjoy your holidays in peace.

Here are a few tips which you can use to stop foreclosure on your house:

1) Stop blaming your banks, financial institutions or yourself for the problem that has arise. You cannot control what kind of solutions that they may be able to offer you so quit blaming them. Instead of quarreling with them, why not listen to their solutions in a calm manner and see what they can offer you. Their solutions may not be so bad after all. Quarreling with them will get you no where. By choosing to work with the people at the banks or financial institutions, you may have a far better chance of stopping the foreclosure on your house.

2) Opt for an interest only payment scheme. What this means is that you apply to pay only the interest of your monthly installments. Yes, the principal portion does not get paid down but remember, the priority right now is to secure your house. You can always go back to the normal paying scheme that pays down your principal amount when your financials get better. Call up or write in to your bank’s credit department to discuss about this option.

3) Get some flexible timing jobs to earn some extra cash for your housing installments. A part time sales job may be a good idea and who knows; you might even quit your present job and make your part time sales job the main occupation. Get some real cash flowing into your pockets right now. No use trying to borrow money from friends, relatives, credit cards or personal loans. Your housing loan installment is a monthly thing, and how long can your friends and relatives lend you the money to clear your installments? Never borrow from a credit card or personal loan to pay off your housing loan. Credit cards and personal loans are more expensive than housing loans and if you decide to pay off housing loan using such facilities as a short term measures, you are setting yourself up for greater financial troubles.

4) Sell your house away and rent. You might have to sell off your house at a deeply discounted price, but it might be a good idea to sell your house and opt for renting. Renting frees you from many troubles that owning a house may have. Scout carefully and you can find a rent that is much lower than your present monthly installment.

Many people look for refinancing in the face of a pending foreclosure. It may be a little late for that. If you refinance constantly through your loan tenure, you would have save a huge some of money which you can put it in an interest bearing account or alternative investment. You would be able to draw upon it for rainy days. If you think that a foreclosure is impending, there must be several reasons for it; retrenched, bad investment, deep loan recalls and etc. And remember, refinancing requires you to bear some legal cost as well. There are many other types of solutions to stop that foreclosure and it really depends on the type of residence that you reside in.

What Are FHA Housing Loans?

FHA Housing Loans are low down payment loans guaranteed by FHA. FHA is an entity of the United States government that provides mortgage insurance for FHA Approved Lenders.

The main reason lenders would lend to home buyers that only have a small amount of money for a down payment is the FHA takes away much of the risk to the lender. If the FHA Housing Loan defaults then FHA will reimburse fully the amount of the loan to the lender. Because of the government insurance the lenders are willing to give more lenient terms to the home buyer.

FHA Housing Loans are geared towards people with less than perfect credit and higher debt-to-income ratios. You can get a good idea what your debt-to-income ratio is by taking all of monthly debt payments such as car payments and credit card payments and dividing the total amount by your monthly income. This is your debt-to-income-ratio.

If this number is close to 30 to 40 percent then there is a good chance you will qualify for a FHA Housing Loan.

Currently the FHA Housing Loan down payment requirement is only 3.5%. Most conventional loans require up to 20% down payment. Also, you can ask the seller to pay most of your closing costs. And like I said above, your credit does not have to be perfect.

FHA does not lend out the money for the mortgage, they only guaranteed the amount of the loan. It is not hard the found a lender that will do a FHA Housing Loan, there are many throughout the United States.

The FHA generally helps low-to-moderate income individuals get mortgages, but one should be clear that it is not actually the FHA that loans out the money. In order to get the benefits of a FHA loan, you must find a lender who is approved to make FHA loans.

Normally it does not take any longer to secure this type of loan than a conventional loan. Usually you can close with 30-45 days.

One disadvantage is the home buyer has to pay private mortgage insurance. You will have an up-front amount that can be rolled back into the mortgage and also a monthly amount that will be included in your monthly mortgage payment.

FHA Housing Loans have become the only low down payment option available in today’s housing market. They have become very popular and they may be the only way that you can get a mortgage for your dream home!