FHA Loan
Facts
Additional FHA Facts
FHA's maximum loan amounts varies, depending upon the county
where you live. It is critical that the your loan amount, including closing
costs (if you finance your closing costs), not exceed the maximum loan amount in
your county set by FHA.
FHA Benefits:
There are no income
limits on FHA loans but there are county loan
limits.
FHA offers more relaxed credit quality, income, and
asset requirements.
You can use a non-owner occupant as a co-borrower. In
other words, your co-borrower doesn't have to live in the home with
you.
If rates should fall and you want to refinance, you won't have to
pay for a new appraisal or credit report.
Basic FHA Loans allow you to
purchase a home with as little as a 3% down payment. In many cases the down
payment can come from a gift by a friend, relative or co-worker.
FHA home
rehabilitation loans allows you to borrow money additional to the purchase price
for home improvements, such as a new kitchen, roof, swimming pool, bathroom
remodel, room addition, etc.
FHA Disadvantages:
The
mortgage insurance premium (MIP) paid on an FHA loan can be higher than on
standard (conventional) financing.
VA Loan Facts
Additional VA Facts
VA Maximum
Loan Amounts
Generally may not be more than $203,000.
VA
Loan Benefits
No downpayment is required in most cases. Loan maximum may
be up to 100 percent of the VA-established reasonable value of the
property.
No monthly mortgage insurance premium to pay.
There is a
limitation on Closing Costs.
You have the right to prepay loan without
penalty.
It's an assumable mortgage, subject to VA approval of the
assumer's credit.
VA Loan Questions and Answers
How do
I apply for a VA guaranteed loan?
You can apply for a VA loan at any mortgage
lender that participates in the VA home loan program. At some point, you will
need to get a Certificate of Eligibility from VA to prove to the lender that you
are eligible for a VA loan.
How do I get a Certificate of
Eligibility?
The lender you select can help you get it.
Can you have
multiple VA loans?
Yes, depending on the circumstances. If you have paid off
your prior VA loan and disposed of the property, you can have your entitlement
restored for additional use. To obtain restoration of entitlement, the veteran
must send VA a completed VA Form 26-1880, along with evidence that the property
has been disposed of and the loan repaid in full. This evidence can be in the
form of a pay-off statement from the former lender, or a copy of the HUD-1
settlement statement completed in connection with the sale of the property. The
application can be presented to any VA Regional Office. A veteran can also
obtain restoration of entitlement, on a one-time basis, if the prior VA loan has
been paid in full but the property has not been sold.
Can I get a VA loan
if I have had a bankruptcy in the last few years?
VA credit standards state
that a veteran with a bankruptcy less than 3 years ago would generally not be
considered a satisfactory credit risk unless: the veteran or spouse has obtained
items on credit since the bankruptcy and has paid the obligations in a
satisfactory manner for a continued period; and the bankruptcy was caused by
circumstances beyond the control of the borrower, which would have to be
verified. A bankruptcy discharged discharged 3 to 5 years ago must be given some
consideration in the underwriting of the loan. A bankruptcy discharged more than
5 years ago may be disregarded. These are the minimum standards that lenders
must follow when making a VA loan. In 95% of the cases, lenders make the
decision to approve a loan without VA's prior approval. Keep in mind that
lenders also have money at risk in giving you a VA loan, so they may have
stricter credit standards than those mandated by VA.
Do I need to occupy
the property?
The law requires that you certify that you intend to occupy the
property as your home. This requirement is considered satisfied if you actually
intend to occupy the property as your home and in fact so occupy it when the
loan is closed or within a reasonable time afterward.
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