insideyournwa.com

If you are thinking about getting a mortgage and buying a house you might want to turn off the news programs. All I hear every single day is how although it is a buyers market and interest rates are extremely low, you should wait to buy because of the mortgage crisis. There are two things that people seem to always overlook in these situations.

First things first, real estate is not dead, over, done, burst, or whatever buzz word the media wants to use. Think for a second about how many of the people you know do not live anywhere. How about you? Do you have a place to call home? Of course you do and as long as people need a place to live real estate will be fine.

Secondly all of the “experts” and even the loan “experts” that go on the local news from local banks apparently haven’t heard of FHA loans. If they had they would tell you how wonderful an FHA loan can be. The government recently relaxed the requirements to boot. All you need is a 3% down payment that can even be gifted to you. FHA doesn’t care where the gift comes from as long as it isn’t the seller of the property. Don’t have 3%? That is ok because there are non-profit organizations out there that will give you a grant of up to 3% to use toward down payments - I’ll get in to that more later in this article.

Ready for the most common myth in the mortgage industry? You won’t believe your eyes when you find out that an FHA loan is not a first time home buyer’s loan. That is right it doesn’t matter how many homes you have bought (within a few restrictions) you can qualify for an FHA loan. Another thing to look at is because the government is insuring this loan the bank goes completely by the FHA guidelines which are much less strict then conventional loans.

So to review, to get an FHA loan all you need is a 3% down payment. If you have previous credit issues or no credit at all you can still get approved relatively easily as long as you can explain away the problems. Even if this is your 2nd, 3rd, or 25th house you can be approved. There is really no reason that all of the media talks about is sub-prime mortgages and nobody brings up the FHA loans. Now for those of you that don’t have the 3%.

There are several organizations out there that will gift you a 1% - 5% grant to go towards your down payment or closing costs on approved loans. The house you are buying is approved when the seller agrees to donate money to that organization to replenish for future borrowers. This is a grant that does not have to be paid back. So all you have to do is have the seller agree to gift money, after closing and the loan has funded, to the same charity that approved your grant. This could be more difficult to do in a seller’s market where houses are selling for over the appraised value, but in the current market finding a house that is 3% below value shouldn’t be too difficult.

Questions, comments, and feedback are always appreciated you can email: questions@insideyournwa.com or simply go to the end of this post and leave a comment.