Over the last 2 years, the FHA mortgage program has undergone major changes that has made it the financing option of choice amongst about 35% of home buyers and homeowners who are refinancing. FHA has always been available to help people get financing who otherwise might not qualify to get a low rate, attractive mortgage. After all, the goal of FHA is to increase home ownership by giving borrowers access to mortgages.
Welcome to the Kindler, Gentler FHA.
Once upon a time, FHA had a smidgeon of a bad reputation attached to it. And here’s why:
- There used to be costs the buyer could not pay, so the seller had to cover them
- Numerous items in the home would have to be repaired before the loan could close
- A different appraisal form had to be used
- Much more paperwork required
- Longer turnaround times for approval and mortgage closing
- Home inspections, termite, well, and septic inspections were required
All of the above have vanished. Regarding inspections, they are only required if the appraiser notes a problem during the value analysis of the property. But inspections are actually a benefit to the borrower and should not be seen as negative. Any borrower would want to know if there are property defects that could require substantial repairs after closing.
Since the crash in housing values, the FHA has come to the rescue allowing New Jersey buyers to refinance and buy homes that would have been impossible with conventional financing. Those with credit scores under 660 will find FHA especially attractive.
For information on FHA mortgage financing in New Jersey, give me a call today.
Until my next post . . .
To stay completely up-to-date on all the pending mortgage changes, to see how they will affect you, and get news about interest rates and programs, just read my weekly updates - Click for free email alerts.
{ 2 comments… read them below or add one }
fha was a blessing for us but we worked with someone who we think wasn’t familiar with the programs. this was very frustrating but we end up getting our home.
Same here. Fha 3.5% down was the only way we were able to buy our home.