| FHA Home Loans
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The Federal
Housing Administration was started in 1934 as part
of the new deal. The FHA's goals have remained the
same through out the years and they are to
contribute to building and preserving healthy
neighborhoods and communities, maintain and expand
homeownership, and to stabilize credit markets in
times of economic disruption.
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The FHA now
offers a variety of loan programs to a large
population and FHA mortgages can have fixed or
adjustable interest rates. Many find these home
loans attractive because they require very small
down payments, gifts can be used for down payments
and closing costs, and because the FHA regulates
the closing costs. These loans also have
qualifications that are easier to meet than
traditional mortgages. The FHA does not require a
minimum FICO score to meet qualifications and
these programs will allow home purchase two years
after a bankruptcy filing.
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Energy
Efficient Mortgages, EEMs, recognize that reduced
utility expenses can permit a homeowner to pay a
higher mortgage to cover the cost of the energy
improvements on top of the approved mortgage. FHA
EEMs provide mortgage insurance for a person to
purchase or refinance a principal residence and
incorporate the cost of energy-efficient
improvements into the mortgage. The borrower does
not have to qualify for the additional money and
does not make a down payment on it. The mortgage
loan is funded by a lending institution, such as a
mortgage company, bank, or savings and loan
association, and the mortgage is insured by HUD.
FHA insures loans. FHA does not provide
loans.
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Section
203(k) insurance enables homebuyers and homeowners
to finance both, the purchase (or refinancing) of
a house and the cost of its rehabilitation through
a single mortgage - or to finance the
rehabilitation of their existing home. FHA
approved lending institutions which include many
banks, savings and loan associations, and mortgage
companies can make loans covered by Section 203(k)
insurance.
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Reverse
mortgages are becoming popular in America. Reverse
mortgages are a special type of home loan that
lets a home owner convert the equity in his/her
home into cash. They can give older Americans
greater financial security to supplement social
security, meet unexpected medical expenses, make
home improvements, and more.
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FHA has
permitted streamline refinances on insured
mortgages since the early 1980's. The "streamline"
refers only to the amount of documentation and
underwriting that needs to be performed by the
lender, and does not mean that there are no costs
involved in the transaction. The basic
requirements of a streamline refinance are:
- The mortgage to be refinanced must
already be FHA insured
- The mortgage to be refinanced
should be current (not delinquent).
- The refinance is to result in a
lowering of the borrower's monthly principal and
interest payments
- No cash may be taken out on
mortgages refinanced using the streamline
refinance process
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| VA Loans |
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The more you
know about our home loan program, the more you
will realize how little "red tape" there really is
in getting a VA loan. These loans are often made
without any down payment at all, and frequently
offer lower interest rates than ordinarily
available with other kinds of loans. Aside from
the veteran's certificate of eligibility and the
VA-assigned appraisal, the application process is
not much different than any other type of mortgage
loan. And if the lender is approved for automatic
processing, as more and more lenders are now, a
buyer's loan can be processed and closed by the
lender without waiting for VA's approval of the
credit application.
Additionally, if the
lender is approved under VA's Lender Appraisal
Processing Program (LAPP), the lender may review
the appraisal completed by a VA-assigned appraiser
and close the loan on the basis of that review.
The LAPP process can further speed the time to
loan closing.
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These loans
are made by a lender, such as a mortgage company,
savings and loan or bank. VA's guaranty on the
loan protects the lender against loss if the
payments are not made, and is intended to
encourage lenders to offer veterans loans with
more favorable terms. The amount of guaranty on
the loan depends on the loan amount and whether
the veteran used some entitlement previously. With
the current maximum guaranty, a veteran who hasn't
previously used the benefit may be able to obtain
a VA loan up to $240,000 depending on the
borrower's income level and the appraised value of
the property. The local VA office can provide more
details on guaranty and entitlement
amounts.
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Veterans who
served on active duty and were discharged under
conditions other than dishonorable, during World
War II and later periods are eligible for VA loan
benefits. World War II (September 16, 1940 to July
25, 1947), Korean conflict (June 27, 1950 to
January 31, 1955), and Vietnam era (August 5, 1964
to May 7, 1975) veterans must have at least 90
days' service. Veterans with service only during
peacetime periods and active duty military
personnel must have had more than 180 days' active
service. Veterans of enlisted service which began
after September 7, 1980, or officers with service
beginning after October 16, 1981, must in most
cases have served at least 2 years. VA regional
office personnel may assist with additional
eligibility questions
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The
application process for VA financing is no
different from any other type of loan. In fact,
the VA application form is the same as that used
for HUD/FHA and conventional loans. The mortgage
lender verifies the applicant's income and assets,
and obtains a credit report to see that other
obligations are being paid on time. If all is well
and the appraised value of the property is enough
to cover the loan needed, the lender, in most
instances, can then close the loan under VA's
automatic procedure. Only about 10 percent of VA
loan applications have to be submitted to a VA
office for approval before closing.
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You may use
VA-guaranteed financing:
- To buy a home.
- To buy a townhouse or condominium unit in a
project that has been approved by VA.
- To build a home.
- To repair, alter, or improve a home.
- To simultaneously purchase and improve a
home.
- To improve a home through installment of a
solar heating and/or cooling system or other
energy efficient improvements.
- To refinance an existing home loan.
- To refinance an existing VA loan to reduce
the interest rate and add energy efficiency
improvements.
- To buy a manufactured (mobile) home and/or
lot.
- To buy and improve a lot on which to place a
manufactured home which you already own and
occupy.
- To refinance a manufactured home loan in
order to acquire a lot.
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A basic
funding fee of 2.0 percent must be paid to VA by
all but certain exempt veterans. A down payment of
5 percent or more will reduce the fee to 1.5
percent and a 10 percent down payment will reduce
it to 1.25 percent.
A funding fee of 2.75
percent must be paid by all eligible
Reserve/National Guard individuals. A down payment
of 5 percent or more will reduce the fee to 2.25
percent and a 10 percent down payment will reduce
it to 2.0 percent.
The funding fee for
loans to refinance an existing VA home loan with a
new VA home loan to lower the existing interest
rate is 0.5 percent.
Veterans who are using
entitlement for a second or subsequent time who do
not make a down payment of at least 5 percent are
charged a funding fee of 3 percent.
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Wholesale
Mortgage Co. can help you with your Texas FHA and
Texas VA home loans. Texas FHA home loans can help
Texas borrowers obtain a Texas mortgage more
easily. Texas VA home loans can help Texas
Veterans secure Texas home loans to purchase their
dream home. Contact Wholesale Mortgage Co. for
help with your Texas FHA and VA home
loans.
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