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  • 1. Tell me more about FHA loans
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    Terms of Use: What are FHA loans? The Federal Housing Administration (FHA) works to make home ownership a possibility for more Americans. The FHA is not a lender but rather an insurer of loans. The FHA issues guidelines to banks and credit unions to follow so that as long as a loan meets those terms, it agrees to insure against loss. While FHA loans used to be very attractive for first-time homebuyers who might not have saved enough for a down payment of 5% or more for a conventional loan or who  More...
  • 2. Why might I consider getting an FHA loan rather than a conventional mortgage?
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    Terms of Use: The major reason to consider getting an FHA loan is because an FHA loan has less stringent criteria than those used by banks and credit unions for qualifying you for a conventional mortgage. As such, an FHA loan may provide an ideal choice for first-time home owners or individuals rebuilding their credit. For instance, the FHA allows you to use 31% of your income towards housing costs and 43% towards housing expenses and other long-term debt. With a conventional loan, this qualifyi  More...
  • 3. What closing costs are associated with FHA loans?
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    Terms of Use: Except for the addition of an FHA mortgage insurance premium, FHA closing costs are similar to those of a conventional loan. The FHA requires a single, up-front mortgage insurance premium equal to 2.25% of the mortgage to be paid at closing (or 1.75% if you complete the HELP program). This initial premium may be partially refunded if the loan is paid in full during the first seven years of the loan term. After closing, you will then be responsible for an annual premium, paid mont  More...
  • 4. What should I do if I believe that I am being excluded from a neighborhood because of race, color, religion, sex, nationality, familial status, or disability?
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    Terms of Use Immediately contact the U.S. Department of Housing and Urban Development (HUD) if you ever feel excluded from a neighborhood or particular house. Also, contact HUD if you believe you are being discriminated against on the basis of race, color, religion, sex, nationality, familial status, or disability. HUD's Office of Fair Housing has a hotline for reporting incidents of discrimination: 1-800-669-9777 (and 1-800-927-9275 for the hearing impaired). To file a complaint, you c  More...
  • 5. How and when can I drop PMI?
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    Terms of Use: Contact your lender directly to ensure that you are actually paying for PMI. If your principal balance is less than 80% of your last appraised value, request that your lender stop charging you for PMI. If your principal balance is more than 80% of your last appraised value, but you know that your home's current market value would cause you to be below the 80% threshold, get an appraisal and present the appraisal to your lender. Be aware that your lender does not have a choice   More...
  • 6. What is RESPA and how does it protect me so that I am fully informed and treated fairly when going through the mortgage process?
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    Terms of Use: RESPA stands for Real Estate Settlement Procedures Act. It requires lenders to disclose information to potential customers throughout the mortgage process. By doing so, it protects borrowers from abuses by lending institutions. RESPA mandates that lenders fully inform borrowers about all closing costs, lender servicing and escrow account practices, and business relationships between closing service providers and other parties to the transaction. For more information visit the RESPA  More...
  • 7. What are some things that I should consider when shopping for a mortgage?
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    Terms of Use Table of Contents 1. Obtain information from several lenders 2. Obtain all important cost information 3. Obtain the best deal that you can 4. Remember: Shop, compare, negotiate 5. Fair lending is required by law 6. Credit problems? 7. Glossary 1. Obtain Information from Several Lenders Home loans are available from several types of lenders-- thrift institutions , commercial banks, mortgage companies, and credit unions. Different lenders may quote you different prices, so you sh  More...
  • 8. What is earnest money and how much is customary?
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    Terms of Use Earnest money is money put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price (though the amount can vary with local customs and market conditions). If your offer is accepted, the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your money is returned to you. If you back out of a deal for anything other than a contingency th  More...
  • 9. How do I save enough for a down payment to buy a house?
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    Terms of Use: With current mortgage rates nearing all-time lows and home prices continuing to climb, you want to "get while the gettin's good!" But accumulating enough for a down payment on your first home can be one of the toughest financial challenges you'll face. The traditional down payment requirement used to be 20 percent of your home's purchase price. However, lending rules have changed recently, so you may be able to put down less (5 or 10 percent) to qualify for a mortgage. But keep in   More...
  • 10. What are points and how do they impact the rate I pay on a loan?
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    Terms of Use Points, also known as discount points, allow you to lower your interest rate by prepaying some of the interest. So instead of repaying the interest on the loan over the loan's life, you can prepay some of the interest up front by paying points. Each point you pay for equals 1% of the total loan amount and reduces the interest rate charged on the loan. When shopping for loans, ask lenders for an interest rate with 0 points and then see how much the rate decreases with each point paid  More...
All information provided through this site is intended to be accurate. However, there may be inaccuracies from time to time which we will make every attempt to correct immediately. Information provided is intended to assist you in making decisions and does not eliminate the need to discuss your particular circumstances with a qualified professional.

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