“Seller is agreeing to do a second mortgage on a sale. Buyer has asked the Seller not to record the second for 6 months to allow the first mortgage company time to sell off the paper on the secondary market. If Seller complies, is Seller participating in Mortgage Fraud?”
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What Are FHA Loan Requirements? | FHA Mortgage Loan Requirements
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FHA loans provide great assistance to many first time home buyers by offering mortgage loans with lower down payments. While this is a benefit for many people, recent changes in policy may have put the loans just out of reach for some would-be homeowners with questionable credit history.
Minimum credit scores for FHA loans depend on the type of loan the borrower needs. To get a mortgage with a down payment as low as 3.5 percent, the borrower needs a credit score of 580 or higher. Those with credit scores between 500 and 579 must make down payments of at least 10 percent.
Benefits of an FHA Loan
The reason why FHA loans are so popular is because borrowers that use them are able to take advantage of benefits and protections unavailable with most traditional mortgage loans. Loans through the FHA are insured by the agency, so lenders are more lenient.
For many home buyers, using an FHA loan can really make the difference between owning your dream house comfortably or turning it into a financial nightmare. The FHA provides a wealth of benefits for applicants that qualify, so make sure you’re making full use of them.
Home ownership rates in America continue to increase at a steady rate due in a large part to the implementation of FHA home loans more than seventy years ago. Over the years, FHA has helped Americans gain the financial independence that comes with owning a home. By creating jobs and reasonable mortgage rates for the middle class, financing military housing, and producing housing for the low income and the elderly, FHA has helped Americans become some of the best housed people in the world with over 73 million Americans currently owning their own homes.
HOW IT WORKS
By serving as an umbrella under which lenders have the confidence to extend loans to those who may not meet conventional loan requirements, FHA’s mortgage insurance allows individuals to qualify who may have been previously denied for a home loan by conventional underwriting guidelines.
FHA loans benefit those who would like to purchase a home but haven’t been able to put money away for the purchase, like recent college graduates, newlyweds, or people who are still trying to complete their education. It also allows individuals to qualify for a FHA loan whose credit has been marred by bankruptcy or foreclosure.
NUTS AND BOLTS
The most popular FHA home loan is the 203(b). This fixed-rate loan often works well for first time home buyers because it allows individuals to finance up to 97 percent of their home loan which helps to keep down payments and closing costs at a minimum. The 203(b) home loan is also the only loan in which 100 percent of the closing costs can be a gift from a relative, non-profit, or government agency.
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You’ve probably seen the many advertisements that promise, a free credit report. You may have asked yourself, how is it possible for all these companies to offer these attractive free services? The answer is, like a lot of things; there is a catch. The catch, of course, isn’t an obvious one, when it comes time to sign up for a free credit report. What many of these unscrupulous companies do is they get you signed up for a free credit report first. Many consumers are finding out the hard way that they have been taken with things like recurring billing and the like. This is how a large number of companies offering free credit reports make their money.
Fortunately, there is a solution to this. Due to numerous consumer complaints the government has provided a resource that allows you to get a truly free credit report. By going to annualcreditreport dot com you can get a free credit report, thanks to our government. The only drawback, however, is that you can only get one free credit report once a year from each of the three credit reporting bureaus.
So, you may be asking, why is it important first time home buyer to get a free credit report? Your credit report shows a complete history of your credit. In some cases, this is gratifying, and others it is disturbing. Regardless of how great you think your credit is it’s always a good idea to check your credit. With identity theft on the rise, checking your credit regularly is more importance than ever. Getting a free credit report, the right way, doesn’t cost you a thing. What it does for you is allow you to see if there are any issues on your credit history. This can be particularly important for the first time home buyer. If you have unresolved issues looming on your credit report it could negatively affect your free credit score gov, resulting in a higher mortgage rate. And assuming that getting the lowest rate on your mortgage is important, you’ll want to make sure your credit is squeaky clean.
It is not at all uncommon for individuals to find mistakes on their credit report. These mistakes can be cleared up, relatively easily with your creditors. You may have an unresolved bill that’s holding your credit down. Even the smallest of unpaid bills can have a negative affect on your credit. All these things can go unresolved if you’re not on top or credit report. Discovering these issues helps in the process of improving your credit so that you get the lowest interest rate possible on your home loan.
Things are hard enough the first time home buyer. You have to come up with a large down payment. You have two get approved for a loan. You have to cover closing costs. The list goes on. Getting your credit straightened out is one of the easiest ways to get on track for the first time home buyer.
After you make sure you have no credit issues, or you get any unresolved issues straightened out, you’ve taken the all-important first step. There are many first time home buyer programs available. Some allow for lower down payments or lower interest rates when it comes to buying your first home. You can withdraw money from qualified plans early if you’re a first time home buyer. There are even some grants in specific states available. Do some homework and be sure to take advantage of these programs, it can save you substantially. And with the cost of real estate, and just how hard it is to be a first time home buyer, you’ll need every advantage you can get.