Buying a House with the FHA

While the Federal Housing Administrations (FHA) home loans was sort of swept under the rug for a decade or so due to the housing market rise, the FHA loan has actually been around since the 1930s. Since then, hundreds of thousands -- if not millions -- of Americans have used the service over the years to turn the dream of homeownership into a reality.

Only in recent years -- starting in the 1990s -- had the FHA home loan seemingly disappeared. This was because most home prices were starting to rise above the FHA home loan maximum with most tract homes costing north of $300,000 and many other homes being well over half a million dollars. 

Now that the housing market has gone down and shifted back to a buyer's market, the FHA home loan has made its timely return.

How it Works

The FHA itself does not actually make a mortgage loan; rather, it insures a mortgage loan, thus lowering the risk that a lender is taking when a buyer puts down less than 20%. 

This procedure allows buyers with less immediate funding and without a large lump of cash just lying around to put an offer on and purchase a house.

The FHA home loan does, however, have a maximum mortgage limit, meaning that the price of a home cannot exceed a specific amount and the mortgage loan itself cannot exceed another specific amount. As of 2009, the mortgage limit was $625,000, and the loan limit was in the $400,000range though these numbers do vary from county to county all over the country.

The Good about FHA Home Loans

Even with a poor credit history and less than great credit 'score,' you may still qualify for an FHA loan. In fact, even after a foreclosure, you may qualify, but you may have to just give it a couple of years.

Another amazing feature is that a non-resident can co-sign on an FHA loan, such as a parent or guardian of a first-time homebuyer. These features and others are all geared towards helping people get on their feet again and gives them a shot at home ownership. Finally, the best being about FHA home loans is that the interest rate on these loans is at 3.75% with a 30-year fixed rate, which is a great interest rate to get!

There's More Good News

Although an FHA mortgage loan will always require upfront monthly mortgage insurance and insurance payments, which will end up having you pay more per month, the fact that you  are able to practically put no money down means that the upfront a month to month payment may very well be perfect for your financial situation.

Remember that if you have any questions, please feel free to contact us at Indigo Mortgage today because our expert, professional team knows all there is to know about FHA mortgage loans, and no one else cares more about your loan than we do!

Posted by Indigo Mortgage at 11:40 AM No comments:

Is the Interest Rate the Most Important Factor in Refinancing Your Mortgage Loan?

The Answer

The answer is no and here’s why. Chances are, if you have begun to do any research into mortgage companies and refinancing, then you have seen an ad or page link on Google advertising 'Lowest Rates,’ 'Best Rates,' etc.

While you may not have pondered on it for long, chances are you came to the conclusion in which it seems every mortgage company claims to have the lowest and best rates in the business. While you do want a lower interest rate, one thing that you should keep in mind is that, if it sounds too good to be true, then it probably is.

There is always a catch and nothing in this world is free. Just because the ad says they offer the lowest interest rates doesn't mean they actually do. While this may appear to be false advertising, it is really just clever advertising designed to reel you in.

A few things you need to remember is that, with many businesses, they will always have their welfare in mind. When a company truly goes above and beyond for you, they really are handling things right and professionally. However, with so many companies out there, how do you weed out the ones that care more about their cash flow then their customers?

What to Look for When Refinancing

When you have made the financial decision to refinance your mortgage, don't just go with the first company you come across. Instead, let them know you are inquiring about interest rates and have every intention of shopping around.

At this point, they will either make you the true best deal they can or they will give you some obscenely low promotional rate. As tempting as it may be to take them up on it, don't. Promotional rates almost always expire at some point and then you will find yourself locked into an obscenely high new rate to pay.

A few other things to watch out for is don't work with a lender that charges an application fee as many companies no longer add this fee to the refinancing process. Negotiate lower origination/activation fees as these fees are not static and can be lowered. Finally, while saving $20 a month in exchange for a thirty-year loan might sound appealing, it's not a good idea. Better to make sure you have a refinance mortgage loan that fits your unique needs.

Now comes probably the most important question: what is the most important factor when refinancing? The company that you go with as it is not them who get to pick and choose -- it's you.  Be sure to go with a knowledgeable company that puts your needs first and considers your mortgage loan refinance the most important thing over trying to do a too-good-to-be-true deal!

Posted by Indigo Mortgage at 11:46 AM 1 comment:

 

Experts Say that the Housing Market is on the Rise

It's been a buyer's market for quite awhile now in the housing market. Prices have been low and sometimes, for home owners, way too low. While it’s great for young, first-time buyers, for anyone trying to get out or a company trying to sell property, it definitely hasn't been a seller's market.

In the Red but Headed to Black

In fact, in most places around the country, selling property now would be like willingly handing the house over due to declining values and so many people in the red with their mortgages. The past five years have made it very tough for homeowners.

It has been this way for a few years now, but the National Association of Realtors (NAR) now says that the market is on the rise though creeping rather slowly.

In the past year, the housing market prices have been going up, reports members of NAR and sales themselves have gone up from the previous year. Due to the lower prices in housing, investors and families seeking a place of their own to live and own have been buying houses again.

This has led to greater sales this past April, which amounted to 9.9% higher than that of April 2011. The same went for this past March in which sales were 3% higher than the previous year.

Greater Home Sales

Other good news is that the month of April brought 400,000 home sales, which was an 11.1% increase over March and its 360,000 home sales. This is the first time since 2010 that we have had a month-to-month increase in sales from that of the previous year.

According to the NAR, if this trend in housing purchases continues, there will be an eventual return to a seller’s market. 

Prices Increasing

Along with greater housing sales, prices are increasing. The national average for housing prices has risen from last year's average, which was approximately $161,000 to about $171,000 this past April, rising just over 10% in a year.

If the sales continue to rise along with the prices, the housing market will eventually migrate from a buyer's market to a seller's market sometime in the near future.

As if mirroring the country's median price, the local market in New Mexico is statistically on the rise as well. These past couple month's home sales have been noticeably higher than last year's spring season, and these months sales have risen consecutively.

While in smaller numbers, if every other state begins to follow these numbers, the housing market may finally recover and the dream of homeownership will become a reality for many more.  

Posted by Indigo Mortgage at 11:22 AM No comments: