No Down Payment Home Loans

FHA loans are secure and flexible. They are a demonstration of the US government’s commitment to the US population that it is fully committed to increasing homeownership. Thanks to the FHA loans program, they reduce the down payments and offer less rigorous underwriting standards than those conditions applied by conventional loans.

There are certain areas in the country where property prices are higher than the national average. This fact is recognized by the FHA and as a result, the FHA has increased the maximum loan amounts under certain conditions, these are based on the county in which you live. You can search for the FHA loan limits that relate to your county by checking on the internet. Use your web search engine to get the exact details.

Why are FHA loans a good deal?
There are many good ideas why you should consider a FHA loan as a first time home buyer. You should note that FHA loans only require you to put down a modest 3% in cash. This is the best no down payment loan currently available. FHA loans are less severe, should you have a less than positive credit rating history. FHA loans are only interested in your credit history over the past 2 years. If there are any problems, the FHA is more than prepared to listen if you are able to come up with plausible explanations and supporting documentation. You should never consider that you are going to be rejected automatically. Don’t despair, you may get better response than you expected. Credit issues are important and applying for a FHA loan these matters will be taken into account, it is good strategy to do an online credit check to see how you might fare.

If you have outstanding collection accounts, they will need to be paid before closing an FHA loan. Should you have had some credit problems in the past two years, you should consider that FHA loans compensating factors can count in your favor. The key factors that you need to note are that you must prepare explanations, should you be within two years since being discharged from bankruptcy and within three years from the date of any foreclosure.

The advantages of no down payment home loans are numerous. First of all, you are not required to pay in any lump sums to get your home loan. Secondly, no down payment home loans come at no costs, streamlining your refinance package can be achieved at no cost to you and you can lower your payment cost base. Annual percentage interest rates are capped at 1% and the lifetime cap is a very interesting 5%. In addition, you will be required to pay the lowest down payment on your loan, actually zero; it is not a bad deal. The ratios are working in your favor; the higher ratios are set at 29% for housing and 41% for indebtedness.

What are the other advantages of no down payment home loans?
They don’t finish with those listed above; there are a number of fringe benefits that are not insignificant. The underwriting requirements are considerably more relaxed than with conventional sources. It is possible to use gift funds for down payments on no cost home loans; this means that someone near and dear to you can assist you to make that most important first step. As you will have the need to have a mortgage insurance policy, this will need to be paid for. The good news is that this can be rolled into your no down payment home loans. There is a need to provide some down payment but this is really low at the minimum which is 3%, but the maximum is a very reasonable 5%.

The seller can also pay prepaid expenses. This is particularly useful if you have access to very limited cash sums as you prepare to purchase. The seller can also assist further by being able to contribute up to 6% of the property purchase price; this has a double-edged advantage as it counts into useful closing costs and discounting points. Don’t forget to take advantage of neighborhood advantage and these are really useful. As a 3% down payment is all that is required, the borrower need only contribute $500 of their own funds, the balance can be in the form of a gift, or cash in hand.