Thursday, March 19, 2009

FHA Loans - The Lowdown - Fact vs. Myth - Forget what your friends told you!

If you are considering a home purchase in the near future remember knowledge is power. Don’t fall for these myths about FHA loans.

MYTH #1:

FHA is only available to First Time Buyers. NOT TRUE!
FHA Loans are available to home buyers whether it is their first, second or fifth home purchase. The truth behind this is you can only have 1 FHA loan at a time. Also, you are able to have a co-signer on an FHA loan. Only one borrower needs to be an occupant.

MYTH #2:

FHA Loans are more difficult to obtain. They are a painful process and require more paperwork and special inspections. NOT TRUE!
FHA Loans require a different set of paperwork for lenders but not necessarily more paperwork. Also, there are no “special inspections” required. HUD requires an appraisal to be made which is common with home loans.
In conjunction with the appraisal, the appraiser will inspect the home for serious issues that need repair and may require the issues to be remedied. Some of the things your FHA appraiser will look for are…
Missing floor covering, fixtures, outlet covers, and/or exterior siding
Rotten wood
Defective lead based paint if built prior to 1978, chipping or peeling
Dysfunctional windows. (not opening or closing/ broken glass)
No bars allowed on windows without a safety latch to open
Roof with less than 2 years of economic life
Roof with missing or damaged shingles
Crawl space must be at least 18 inches
No water or debris in the crawl space
Attic must have insulation and access if there is an attic
HVAC & plumbing & electrical must function properly
Electric garage door must have a reverse stop
Garage must have drywall on any wall adjacent to living areas
Any safety and security issues

MYTH #3:

FHA Loans are impossible to qualify for. NOT TRUE!
If you are considering a home purchase ask yourself the following questions.

1. Do you have steady employment?

2. Do you have excessive debt: if so, you may not qualify if your debt is too high compared to the amount of money you are bringing in each month.

3. Do you have a down payment: Down payment amounts are much lower for FHA loans, but some money to put down is necessary. Currently FHA requires a 3.5% down payment. In Oklahoma you may qualify for down payment assistance with Community Action. Also, FHA allows the down payment to be a gift from family.

4. Do you have good credit or better: Those with very low credit scores may not qualify for a home loan right now. If your credit score is below 580 it may be more difficult to obtain a home loan.

MYTH #4:

FHA Loans are only for small loan amounts. NOT TRUE!
In Oklahoma the FHA Loan limit is $271,050.

If you have questions on FHA loans please contact me and I will put you in touch with a qualified FHA loan officer. Only a few Mortgage brokers are actually FHA approved.

Talena M. Floyd
Chinowth & Cohen Realtors
"Make My Hometown, Your Hometown"

(918) 361-3404

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