Need to buy a home but don't qualify with traditional lenders?
Read our in-depth guides to learn more about FHA Loans, non-conforming bank loans, hard money loans, seller financing, and peer-to-peer lending.
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Posted on 05 March 2010
Although the FHA has changed some of their requirements, it’s important to take note that FHA loans are still assumable. That means buyers looking for a deal can “take over” FHA mortgages from sellers that have them.
The Washington Post explains:
“The major force behind assumptions is the ability of buyers to get financing at an interest rate lower than that currently charged by lenders. If the home seller has a mortgage with a rate below the market rate, having the buyer assume the seller’s loan can be better for both. The buyer enjoys a lower rate and avoids the settlement costs on a new mortgage.”
FHA mortgages are just about the only type of home loans that are assumable these days. They also offer lower interest rates and more generous qualifying requirements than conventional loans.
Posted on 21 February 2010
Obama is pumping money into states hit the hardest by the mortgage crisis. The Los Angeles Times reports:
“Under the new policy, $1.5 billion that had been reserved for the bank bailout will be rerouted to five states that have seen housing prices drop more than 20% since 2006: Nevada, California, Michigan, Florida and Arizona.
The money will go toward homeowners who have lost their jobs, owe more than their houses are worth or cannot afford to make monthly payments.”
The new program is designed to help the people who have suffered from the mortgage crisis rather than give more to banks that have already recieved bailouts. Hopefully this will prove more successful than the Making Home Affordable mortgage modification program (many were excited, few have been able to get coherent answers from any bank…)
Posted on 19 February 2010
The Federal Housing Administration (FHA) recently set tough new requirements for they mortgages they back. According to the Edmond Sun the changes include the following:
The new FHA regulations will make buying a home more difficult for some borrowers. But, they are still able to offer the most lenient terms available in the recession housing market.
Posted on 08 February 2010
If you have a low income and are willing to move to a rural area, you may be able to get a rather amazing deal on a loan. The federal government offers a program called Rural Housing Direct Loans, giving borrowers the opportunity to receive up to 100% financing with mortgage payments determined by their income level.
The requirements are quite narrow, as explained by the USDA:
“Applicants for direct loans from HCFP must have very low or low incomes. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI…Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance, which are typically within 22 to 26 percent of an applicant’s income. However, payment subsidy is available to applicants to enhance repayment ability. Applicants must be unable to obtain credit elsewhere, yet have reasonable credit histories .”
If you’re one of the few that fits these unique requirements, check out the USDA website for more info on these government subsidized mortgages.
Posted on 05 February 2010
The Calgary Herald reports:
“All borrowers will have to demonstrate that they could make the payments on a five-year, fixed-rate mortgage — even if they end up choosing a mortgage such as a variable-rate mortgage, that would result in a smaller payment.
And anyone who wants a government-insured mortgage to buy a home in which they will not live will have to come up with a minimum down payment of 20 per cent, up from five per cent.”
Wow, those are some tough new rules! The American-based FHA is expected to tighten their mortgage requirements as well. If the changes are this stringent, you can bet that a lot more borrowers will be looking for creative financing solutions. photo credit: ★Debs★
Posted on 01 February 2010
Many borrowers are considering peer-to-peer lending after having frustrating experiences with overly-cautious banks.
My Bank Tracker explains:
“Because banks are now taking a more cautious position, peer-to-peer (P2P) lending networks have been making headway for both borrowers and lenders. For many prospective borrowers who cannot obtain a loan through traditional methods, P2P loans may be the next viable alternative to a bank.”
Currently, most peer-to-peer lending offers cannot cover an entire mortgage. However, many borrowers choose peer-to-peer lending in order to consolidate debt or make purchases for their business.
In some cases, home buyers are able to take out a peer-t0-peer mortgage from a family member or friend using private programs such as Virgin Money. Total costs including escrow and closing are about $3k.