Saturday, January 15, 2011

Do you qualify for an FHA Home Loan?

FHA loans are in vogue again.  Do you qualify?

Many people have misconceptions about FHA (Federal Housing Administration) loans. Test your knowledge with these True or False questions.

1) FHA loans are only for lower-income borrowers. FALSE! FHA loans are available to everyone, regardless of income level.

2) FHA loans are only available to first-time buyers. FALSE! Whether you are buying your first home or your fourth, fifth or sixth, it doesn't matter.

3) FHA loans can be for as much as $793,750. TRUE! Although maximums vary from county to county, FHA insures loans up to $793,750. They are not just for small loans.

4) Condominiums can be financed with FHA loans. TRUE AND FALSE! Condominium Home Owners' Associations must apply and meet certain requirements in order to qualify for eligibility for FHA loan approval. Not all HOAs apply for eligibility. Your real estate agent can help you find out if a particular complex qualifies.

5) FHA loans are associated with Section 8 Housing. FALSE! Although both programs are administered through the Federal government, they are not associated in any other way.

6) FHA loans are assumable. TRUE! If you have financed your home with an FHA loan, another party can buy it from you by taking over the payments on your loan at the interest rate you locked in (currently as low as 4.5%). This is not particularly important while interest rates remain low, but once they start going back up (and they will) an assumable mortgage at a low interest rate may make your home more attractive to buyers when you are ready to sell.

Want to know more? Give me a call at 206-708-9800, or talk to your favorite lender.

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