Although there are some home owners currently frustrated by their home’s value compared to their current loan balance, they are not the majority. Make no mistake; this is likely the best time for anyone to purchase a home. The real estate market does go through cycles. The current down swing that is on the verge of a climb makes it so attractive. Understand these rules when buying that first home.
Owning a car does not make the owner a mechanic. Using a computer does not make a person an electrical engineer or a software engineer. And buying a home does not make someone a lending expert. That is why it is so important for people to get solid information about the different types of loans available before they make their final decision on a home purchase. The USDA mortgage is simple to understand once the facts are laid out.
Cory Kessenich here today to talk to you about major changes to the FHA loan program.
If you’ve seen some of our past FHA posts, then you know that the FHA program is a loan product that is insured by the government and has expanded guidelines to help ALL types of borrowers. This is a government program that funds itself partially by charging borrowers a monthly premium that works much like private mortgage insurance. We refer to this fee as the Monthly Insurance Premium or MIP.
When the sub-prime mortgage loans crashed it was the FHA loans that saved the day. Millions of buyers that would have continued to rent or live with relatives were able to buy a home thanks to the Federal Housing Administration’s insured loans. Gary Thomas, the president of NAR (National Association of Realtors) explained this point in a recent testimony in front of the Senate Banking Committee. He went on to explain that the down turn in the real estate market would have been much worse if not for FHA.
People are fixated on big numbers. Couples celebrating their 50th wedding anniversary usually receive a great party. A person that retires from a company after 30+ years of service is typically treated to a great reception from co-workers and friends. Recently, the Veterans Administration made a big splash when they announced their 20 millionth VA home loan recipient.