Are the Rumors True About FHA Home Loans?

By Chris Williamson · July 11th, 2008

FHA San Mateo It seems like there is constantly a new rumor going around, Madonna and Alex, Brett Favre snubbed, Angelina and The Twins… and the mortgage market is no exception.

I can’t even begin to count the number of times I sit down with a new client and before we even get started, they have already assumed that they are ineligible for certain financing programs. To use an example from Raymond’s Monday post, let’s talk FHA loans.

Here are just a few of the questions/concerns I’ve heard…

How can I get an FHA loan if my parents are co-borrowers? Don’t they have to occupy the residence? I’m 28 years old… I can’t live with my parents!
Aren’t FHA programs only for first-time buyers?
I’d rather not use an FHA loan, I don’t have time for extra paper work and inspections.

While, in fact, all of these are completely untrue. Here’s the actual story…

I don’t want you to live with your parents either. As long as one of the parties occupies the property (YOU), you can still qualify for an FHA loan.
FHA loans are not just for first-time buyers. What often causes this misconception is that there is a limit to the amount that can be loaned. For San Mateo County, the limits are $729,750 for single family homes, $934,200 for two family homes, $1,129,250 for three family homes and $1,403,400 for four family homes – which still makes this a viable program for even some trade up buyers.
There is no extra paper work or inspections. Different paperwork? – Yes. Special inspection? – No. What is necessary, however, is an appraisal. In declining market areas, two appraisals may be necessary.

You will often be surprised just how many different types of financing programs are out there and which ones you’ll qualify for. That’s why it’s so important to sit down with a professional mortgage broker who can clearly explain your options and help you find the program that meets both your short term needs and long term financial goals.

Chris Williamson is a Mortgage Advisor – Broker Associate with Guarantee Mortgage in San Mateo, California.

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