With the housing market taking such a nose dive and mortgage lenders becoming more and more suspect by the public, FHA loans are making a comeback. The good news is that they have loans for homeowners who are looking to purchase a home, refinance a home or remodel a home, so their program is diversified enough for every Californian. Of course you’ll want to get a real estate appraiser involved, in order to appraise the fair market value of your home, but once you know where your real estate sits in the housing market FHA may be able to help you.
The Federal Housing Administration (FHA), was established in the 1930s, and was put into place to help people achieve part of the American Dream…owning a home. The FHA loans are government backed, which means they ensure your loan with the mortgage lender. Because of this insurance, mortgage lenders are much more likely to give you the loan and the standards aren’t quit as strict. In fact FHA loans were specifically intended to help lower-income families and first time buyers get into the housing market, so it’s no wonder they are starting to make a comeback.
With rates as low as 3% of the purchase price of the home, and some programs that require no money down, the benefits of an FHA loan outweigh its costs. And let’s face it real estate is a risky proposition for many people right now, which is why the FHA backed loans are so helpful. It has always been difficult for first time buyers to get a loan, but today it’s near impossible. While the prices of homes are going down, the credit history mortgage lenders are looking at requires much more to it than it did in the past. But you don’t have to be purchasing a piece of real estate to qualify for one of the government backed loans, because they offer them for people who need to refinance as well.
There are so many of you out there who got into the housing market with a low variable interest rate only to see it go up and your mortgage double or triple, so you may want to look into refinancing for one of the more stable interest rates we are seeing now. Once you have the value of your home assessed by a real estate appraiser, you can take the report to a mortgage lender that offers one of the FHA insured loans and you’ll stand a much better chance of getting your mortgage payments down to a reasonable level.
If you have decided to love the home you are stuck with, you can look into getting an FHA insured loan to remodel and turn the fixer-upper you bought at the height of the housing market bubble into the dream home you really intended to move into. No matter how you slice it, things are more difficult in the real estate market than they were before. But there are options out there, and with a little research you may be able to survive until the next housing bubble comes around.
Please visit Mahler & Associates Appraisals for more information.