Important new facts about FHA loans by Jimmy stepanian

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A balloon mortgage has fixed monthly payments for a few years, and then the staying balance has to be paid off in a lump sum. Mostly, balloon mortgages are persent only in rural areas.

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| On Chritmas | 7 Important facts about FHA loans | Jimmy stepanian | Jim stepanian | What is an FHA loan An FHA loan is a mortgage coverd by the FHA Federal Housing Administration. Borrowers with Federal Housing Administration loans pay for mortgage insurance which save the lender from a loss if the borrower revert on the loan. Why people get FHA loans Because of that insurance dealer lenders can and do offer FHA loans at irresistible interest rates and with less stringent and more adaptable qualification requirements. The FHA is an agency within the U.S. Department of Housing and Urban Development. Here are importants seven facts that borrowers should know about FHA loans....

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1. Jumbo mortgage A jumbo loan is a mortgage that is very big to be bought by mortgage giants Fannie Mae and Freddie Mac. In much of the country the limit is 418100. In costly housing markets such as Los Angeles Irvine CA that number is bigger. It maxes out at 636100. 2.Balloon mortgage A balloon mortgage has fixed monthly payments for a few years and then the staying balance has to be paid off in a lump sum. Mostly balloon mortgages are persent only in rural areas. According balloon mortgage you might make the monthly payments as if it were a 30-year loan. But the existing balance would have to be paid in a lump sum after 5 7 or 10 years. You would be expected to re-finance if you do not have enough cash to pay off the mortgage. 3. Assumable mortgage Assumable mortgages are rare. A homeowner with an assumable loan can hand off the loan to a buyer alternatived of paying it off using proceeds from the home sale. 4. Construction to permanent mortgages Construction loans help many people who want to build homes buildings rather than buy existing ones. They important feature a two-step borrowing process. During construction money is paid periodically to contractors as they complete work and you pay interest on the amazing amount. After the house or building is completed the loan is converted into a permanent loan usually a standard fixed rate or adjustable rate mortgage. 5. Seller financing Seller financing is a consensus in which the seller of the home provides financing to the buyer. The buyer makes monthly payments to the seller instead of the bank. A promissory note is protectes by the property. This type of financing often includes an assumable mortgage. 6. How to clean up your credit You will check your credit report an annualy or so before buying a home. That gives you time to correct faults in the report and change ways you use credit to improve your score. To get a sense of where your credit stands go to my Bankrate to collect your credit report and score today free and with no obligation. Scour everything from the way your name is spelled and previous addresses to checking that each and every account is yours and reported correctly. If an account has been locked make sure that is accurately reported. 7. Correct and wait All three credit bureaus make it easy to dispute errors online. If everything is right pay down balances and let time do the rest. The credit reporting agencies do charge a fee if you want to know your credit score. Lenders look at all 3 scores and use the middle one.

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