Different types of FHA Loans

FHA Home Loans have many options that anyone can consider. The purpose of writing on this particular topic is to share with you what is available. I was not aware of all the different types of loans that FHA had to offer. Sure you will know about some of the ones that I talk about it, but there might be others that fit your situation better. So before you run right out and say you want a specific type of loan, read this thoroughly. Do additional research if necessary and choose what works best for you.

I heard you guys say, you are always saying research, research – couldn’t I have done enough research by now. Not necessarily and research aids in making informed decisions versus impulse decisions which lead to error, owning the American nightmare versus dream and even imposed tension in a marriage because someone did not research thoroughly before signing on the dotted line. I can’t tell you how many times I have heard that and have even witnessed something happening once or twice in my own marriage because all the information was not received up front. Don’t leave it up to the mortgage banker, broker or realtor to give you all the information. Do your own homework and research. At the end of the day, you are responsible for the mortgage payments and all that is involved with home ownership.

Let’s get to the different types of loans which I am going to talk about over two or three days. If it takes two days to cover it, then that is what it will take; otherwise it will be three. First we have the FHA 203(b) Loan – from what I read it is the most commonly used, offers a low down payment, flexible qualifying guidelines, limited lender’s fees and a maximum loan amount.

I believe one of the biggest benefits of any loan is having a loan with a low down payment. If you have a low down payment that alleviates more of a pressure of attempting to manage a higher down payment when you know you don’t have the money. When I was reading about this loan, it said this loan enables the homebuyer to finance both the purchase and rehabilitation of a home through a single mortgage. This meaning it is divided with a portion being used to pay off the seller’s existing mortgage and the remaining is placed in an escrow account and released as rehabilitation is completed.

Correct me if I am wrong, if it has to be rehabilitated isn’t it a pre-existing foundation? I would believe if it wasn’t pre-existing that this type of loan would then not be available for this particular buyer and the buyer would have to begin his or her search all over again. Definitely send me some comments on this, help my understanding of the 203(b). I am always looking for information that I believe has not been shared on a larger scale to share with my readers.

We have discussed the 203(b) – send me your comments and thoughts about this type of loan. Even if you have had this type of loan, what do you think the benefits are or what is the downside?

Dr. Taffy Wagner

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