How Can Mortgage Programs Help You?
FHA loans are highly recommended by most loan counselors. FHA loan or the Federal Housing Administration loan has been around since 1934 This is ideal for first time home buyers because FHA loans require low downpayment, closing cost, and your credit score doesn't have to be too high. The FHA also offers Reverse Mortgage programs for senior citizens with low loan balance, converting a potion of their equity to cash.
The Government mortgage programs 2010 are the extensions and improvised versions of the existing mortgage help plans. These help the home owners to pay their monthly loan payments on time. The government intends to draw cash from the $50 billion designated to real estate in the Troubled Asset Relief Program and not from the new taxpayer cash in order to finance these programs.
The Making Home Affordable Program contains four different subsidiary mortgage programs which cover a variety of circumstances. These subsidiary programs are the Home Affordable Refinance Program (HARP), the Home Affordable Unemployment Program (HAUP), the Home Affordable Foreclosure Alternatives Program (HAFA) and the Home Affordable Modification Program. The Home Affordable Refinance Program was enacted to assist borrowers in refinancing their current homes when they owe more than the home is worth to qualify for a regular mortgage refinance.
Price Appreciation Agreement - There are also firms that will give you money today in exchange for an "equity-share" in the future appreciation of your home's value. These mortgage programs are usually aimed at higher value homes (over $500,000 and may only be available in areas of the country with a track record of strong property value growth. The benefit of these programs is that you may be able to tap into your equity without the high up front costs of a reverse mortgage.
The states facing the most foreclosures and unemployment are eligible to receive help to provide temporary assistance to qualified homeowners. In an effort to combat the number of foreclosures, the State of California has come up with mortgage reduction California, a 2010 program that works in conjunction with federal programs for mortgage assistance. The California Assist Loan program will actually provide potential buyers with up to $10,000 in down payment. The loan is interest-free and is set up as a second mortgage on the home with no monthly payments. The loan is repaid when the house is sold. The Homeowner Assistance for Moderate Income Loan Program offers up to $5000 towards their down payment or closing costs, at a standard 5% interest rate. However, borrowers have to fulfill certain requirements to qualify for these mortgage programs.
Educate yourself. Keep up to date with mortgage industry trends. For example, right now a 40 yr mortgage is better than an interest only or a 50 yr program. The secondary market, which drives mortgage programs and rates, looks negatively on 50 yr and interest only products. When this happens your interest rates get higher.
The name of the game is saving money! When you are shopping around for a mortgage make sure you ask your loan officer about special mortgage programs that avoid PMI. If you cannot qualify for these then ask about their 80/20 programs. Mortgage shopping can be confusing and frustrating, but it doesn't have to be. Find a lender who wants to save you money. Good luck and happy shopping!