New Info On Home Loans
By Nick Hogan
An increase in the number of foreclosures this year may have lead to the recent passage a bill to modernize the FHA Lending process. What some might not know is that similar bills have passed through the House for many years previous but have never had much success from the Senate and have always died in the Senate. This year could be different as even the Senate has a similar bill to help the modernization of the FHA.
The passed bill is proposing to increase the fha loan limits. Currently it is extremely difficult to receive an FHA loan for homes in higher priced markets because the value of the home is inflated to their respective regions. The same policies for FHA approval are standard throughout the United States and so it creates a hardship for first time homebuyers to purchase a home with an FHA loan in these high priced areas.
Another change the bill is proposing is the need, or lack there of, for a down payment. Currently there is up to a 3% down payment requirement which can be difficult for this individuals because often times they have poor to no credit and no savings. So if you are a first time homebuyers the changes could benefit you to not be required to make that down payment.
The Bill also introduces a way for FHA borrowers to have their loan turn into a conventional loan. After having the lender pay the insurance premium up front and then passing that over to the borrower it can eventually be terminated if the borrower makes payments on time for several years. This would in turn make the FHA loan a regular mortgage for the rest of the term.
You can read up about the FHA policies and legislation currently being discussed in Congress and find up to date information and all the information necessary in determining your borrowing options.
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