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- EASY QUALIFY FIRST TIME BUYER
PROGRAMS - LOW CREDIT SCORES - NO PROBLEM
- 100% NO MONEY DOWN FOR QUALIFIED
BORROWERS - ALSO EASY QUALIFIER 3% DOWN
PAYMENT - CLOSING COSTS CAN BE INCLUDED IN
THE LOAN - 203(k) REHAB PROGRAM AVAILABLE
FHA New Home Purchase Quick Facts
| FHA FIRST TIME HOME BUYER PROGRAM |
Why should I buy, instead of rent?
Answer: A home is an investment. When you rent,
you write your monthly check and that money is
gone forever. But when you own your home, you
can deduct the cost of your mortgage loan interest
from your federal income taxes, and usually from
your state taxes. This will save you a lot each year,
because the interest you pay will make up most of
your monthly payment for most of the years of your
mortgage. You can also deduct the property taxes
you pay as a homeowner. In addition, the value of
your home may go up over the years. Finally, you'll
enjoy having something that's all yours - a home
where your own personal style will tell the world
who you are.
What are "HUD homes," and are they a good
deal?
Answer: HUD homes can be a very good deal.
When someone with a HUD insured mortgage
can't meet the payments, the lender forecloses on
the home; HUD pays the lender what is owed;
and HUD takes ownership of the home. Then we
sell it at market value as quickly as possible.
Read all about buying a HUD home. Check our
listings of HUD homes and homes being sold by
other federal agencies.
Can I become a homebuyer even if I have I've had
bad credit, and don't have much for a
down-payment?
Answer: You may be a good candidate for one of
the federal mortgage programs. Start by
contacting one of the HUD-funded housing
counseling agencies that can help you sort
through your options. Also, contact your local
government to see if there are any local home
buying programs that might work for you. Look in
the blue pages of your phone directory for your
local office of housing and community
development or, if you can't find it, contact your
mayor's office or your county executive's office.
Q & A about first time home buying....
| Quick FREE FHA Pre-Qualification |
How much money will I have to come up with to buy a home?
Answer: Well, that depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come
up with enough money to cover three costs: earnest money - the deposit you make on the home when you submit your offer, to prove to the seller
that you are serious about wanting to buy the house; the down payment, a percentage of the cost of the home that you must pay when you go to
settlement; and closing costs, the costs associated with processing the paperwork to buy a house.
When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest
money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your
earnest money varies. If you buy a HUD home, for example, your deposit generally will range from $500 - $2,000.
The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the
purchase price. That's why many first-time home buyers turn to HUD's FHA for help. FHA loans require only 3% down - and sometimes less.
Closing costs - which you will pay at settlement - average 3-4% of the price of your home. These costs cover various fees your lender charges and
other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won't be caught by
surprise. If you buy a HUD home, HUD may pay many of your closing costs.
In addition to the mortgage payment, what other costs do I need to consider?
Answer: Well, of course you'll have your monthly utilities. If your utilities have been covered in your rent, this may be new for you. Your real estate
broker will be able to help you get information from the seller on how much utilities normally cost. In addition, you might have homeowner
association or condo association dues. You'll definitely have property taxes, and you also may have city or county taxes. Taxes normally are rolled
into your mortgage payment. Again, your broker will be able to help you anticipate these costs.
So what will my mortgage cover?
Answer: Most loans have 4 parts: principal: the repayment of the amount you actually borrowed; interest: payment to the lender for the money you've
borrowed; homeowners insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most
lenders; and property taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a
year. Most loans are for 30 years, although 15 year loans are available, too. During the life of the loan, you'll pay far more in interest than you will in
principal - sometimes two or three times more! Because of the way loans are structured, in the first years you'll be paying mostly interest in your
monthly payments. In the final years, you'll be paying mostly principal.
I know there are lots of types of mortgages - how do I know which one is best for me?
Answer: You're right - there are many types of mortgages, and the more you know about them before you start, the better. Most people use a fixed-
rate mortgage. In a fixed rate mortgage, your interest rate stays the same for the term of the mortgage, which normally is 30 years. The advantage of
a fixed-rate mortgage is that you always know exactly how much your mortgage payment will be, and you can plan for it. Another kind of mortgage is
an Adjustable Rate Mortgage (ARM). With this kind of mortgage, your interest rate and monthly payments usually start lower than a fixed rate
mortgage. But your rate and payment can change either up or down, as often as once or twice a year. The adjustment is tied to a financial index,
such as the U.S. Treasury Securities index. The advantage of an ARM is that you may be able to afford a more expensive home because your initial
interest rate will be lower. There are several government mortgage programs,including the Veteran's Administration's programs and the
Department of Agriculture's programs. Most people have heard of FHA mortgages. FHA doesn't actually make loans. Instead, it insures loans so
that if buyers default for some reason, the lenders will get their money. This encourages lenders to give mortgages to people who might not
otherwise qualify for a loan. Talk to your real estate broker about the various kinds of loans, before you begin shopping for a mortgage.
So what will happen at closing?
Answer: Basically, you'll sit at a table with your broker, the broker for the seller, probably the seller, and a closing agent. The closing agent will have a
stack of papers for you and the seller to sign. While he or she will give you a basic explanation of each paper, you may want to take the time to read
each one and/or consult with your agent to make sure you know exactly what you're signing. After all, this is a large amount of money you're
committing to pay for a lot of years! Before you go to closing, your lender is required to give you a booklet explaining the closing costs, a "good faith
estimate" of how much cash you'll have to supply at closing, and a list of documents you'll need at closing. If you don't get those items, be sure to
call your lender BEFORE you go to closing. Be sure to read our booklet on settlement costs. It will help you understand your rights in the process.
Don't hesitate to ask questions.
Answer: Well, that depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come
up with enough money to cover three costs: earnest money - the deposit you make on the home when you submit your offer, to prove to the seller
that you are serious about wanting to buy the house; the down payment, a percentage of the cost of the home that you must pay when you go to
settlement; and closing costs, the costs associated with processing the paperwork to buy a house.
When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest
money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your
earnest money varies. If you buy a HUD home, for example, your deposit generally will range from $500 - $2,000.
The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the
purchase price. That's why many first-time home buyers turn to HUD's FHA for help. FHA loans require only 3% down - and sometimes less.
Closing costs - which you will pay at settlement - average 3-4% of the price of your home. These costs cover various fees your lender charges and
other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won't be caught by
surprise. If you buy a HUD home, HUD may pay many of your closing costs.
In addition to the mortgage payment, what other costs do I need to consider?
Answer: Well, of course you'll have your monthly utilities. If your utilities have been covered in your rent, this may be new for you. Your real estate
broker will be able to help you get information from the seller on how much utilities normally cost. In addition, you might have homeowner
association or condo association dues. You'll definitely have property taxes, and you also may have city or county taxes. Taxes normally are rolled
into your mortgage payment. Again, your broker will be able to help you anticipate these costs.
So what will my mortgage cover?
Answer: Most loans have 4 parts: principal: the repayment of the amount you actually borrowed; interest: payment to the lender for the money you've
borrowed; homeowners insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most
lenders; and property taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a
year. Most loans are for 30 years, although 15 year loans are available, too. During the life of the loan, you'll pay far more in interest than you will in
principal - sometimes two or three times more! Because of the way loans are structured, in the first years you'll be paying mostly interest in your
monthly payments. In the final years, you'll be paying mostly principal.
I know there are lots of types of mortgages - how do I know which one is best for me?
Answer: You're right - there are many types of mortgages, and the more you know about them before you start, the better. Most people use a fixed-
rate mortgage. In a fixed rate mortgage, your interest rate stays the same for the term of the mortgage, which normally is 30 years. The advantage of
a fixed-rate mortgage is that you always know exactly how much your mortgage payment will be, and you can plan for it. Another kind of mortgage is
an Adjustable Rate Mortgage (ARM). With this kind of mortgage, your interest rate and monthly payments usually start lower than a fixed rate
mortgage. But your rate and payment can change either up or down, as often as once or twice a year. The adjustment is tied to a financial index,
such as the U.S. Treasury Securities index. The advantage of an ARM is that you may be able to afford a more expensive home because your initial
interest rate will be lower. There are several government mortgage programs,including the Veteran's Administration's programs and the
Department of Agriculture's programs. Most people have heard of FHA mortgages. FHA doesn't actually make loans. Instead, it insures loans so
that if buyers default for some reason, the lenders will get their money. This encourages lenders to give mortgages to people who might not
otherwise qualify for a loan. Talk to your real estate broker about the various kinds of loans, before you begin shopping for a mortgage.
So what will happen at closing?
Answer: Basically, you'll sit at a table with your broker, the broker for the seller, probably the seller, and a closing agent. The closing agent will have a
stack of papers for you and the seller to sign. While he or she will give you a basic explanation of each paper, you may want to take the time to read
each one and/or consult with your agent to make sure you know exactly what you're signing. After all, this is a large amount of money you're
committing to pay for a lot of years! Before you go to closing, your lender is required to give you a booklet explaining the closing costs, a "good faith
estimate" of how much cash you'll have to supply at closing, and a list of documents you'll need at closing. If you don't get those items, be sure to
call your lender BEFORE you go to closing. Be sure to read our booklet on settlement costs. It will help you understand your rights in the process.
Don't hesitate to ask questions.
Government Assisted Mortgage Programs helping families in need
CALL 1-800-341-8505
Consultants on duty 24-7