With the shake up in conventional mortgage financing FHA loans have come back into the lime light! So I asked a local lender to share his take on Denver FHA Home Loans. When you’re buying a Denver home it’s best to know all of your options!
FHA Home Loans have become an increasingly popular choice for home buyers over the past couple years. With the poor economy and tightening bank qualification standards for conventional loans, many home buyers have been able to use FHA Home Loans to purchase a home.
In the past, FHA financing has been mainly a first time home buyer program or one that has been utilized by people with poor credit or a difficult situation. However, in today’s marketplace, even some home buyers with excellent credit and a down payment have been able to use FHA Home Loans to finance their home.
The positive of FHA Home Loans is that they require very little down payment and rates are still excellent and comparable to conventional financing. Couple this with easier qualifying standards, and FHA can be a great choice.
The negative of FHA Home Loans is that mortgage insurance is required unless you are obtaining a 15 year fixed rate mortgage with at least a 10% down payment. FHA Home Loans carry both an up-front mortgage insurance premium, currently 1.75% and set to go up to 2.25% in April, 2010, and a monthly mortgage insurance premium. The monthly amount is much lower than the monthly rate of a comparable conventional loan, unless you have more than a 10% down payment.
FHA also has many creative programs that can help you buy your home.
The FHA Energy Efficient Mortgage will enable you to finance the cost of energy-efficient improvements such as heating and cooling system upgrades, solar power, and insulation, even if your total loan amount exceeds the sales price of the home.
The FHA Kiddie Condo loan enables a parent to co-sign for their children without living in the home.
The FHA Streamline Refinance can help home owners reduce their rate and payment by refinance from an existing FHA Home Loan to another, all with less paperwork.
These creative programs along with competitive rates make FHA Home Loans a great choice for many consumers. In fact, FHA’s share of the home loan market has increased over the past 2 years to nearly 30% of all loan originations.
Written by RJ Baxter First Mortgage Corp. Contact RJ Baxter
{ 3 comments… read them below or add one }
For years, most of my clients took conventional loans but today, FHA is the way to go for all the reasons you stated.
Thank godness for FHA loans right now. Most of my buyers are first time buyers and need the small down payment.
The benefits of FHA loans many times out weight the upfront mortgage fee and monthly fee.
Janie – The small down payment is a real attraction for my buyers as well.