FHA Loan Facts for Frederick Home Buyers
There are many features of FHA loans that are great for today's Frederick home buyers. Here are the highlights:
Downpayment: 3.5%
Common Sense Underwriting: Although credit scores are a part of the consideration on an FHA loan, the underwriting takes into account your last 12 to 24 months payment history, and uses what we call "common sense underwriting."
Assumable: This is probably the most under-appreciated feature of an FHA loan. If you are a savvy buyer, thinking of your exit strategy 5 years from now, think about what the interest rate might be in 5 years. With the increased government spending, increased inflation, and devaluation of the dollar looming ahead of us...do you think rates will be able to stay at the low 5% that we see today?
When you are ready to sell, one of your greatest selling points could very likely be that you have a 5% assumable loan.
For the sake of disclosure:
The seller of a home with an assumable FHA loan is liable for the first 5 years of the new loan. If the new buyer makes late payments, both the seller and the buyer get negatives on their credit.
If you are a veteral with a VA loan, allowing a veteran to assume your loan keeps you from getting a new VA loan.
FHA loans carry a mortgage insurance premium, about .5% annually, which makes the loans a little more today, but compared to a future 8%,or 9% or even 10%, 5.5% looks pretty good.
To read why this is your window of opportunity on FHA loans, check out Dan Green's blog: The Mortgage Reports.
Contact us for information from one of our preferred lenders for details.
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The Highland Group
Chris & Karen Highland * 301-831-9947
Turning Point Real Estate – 301-831-8232
email us: isell4u2@msn.com
Text Us: 301-401-5119