What credit crunch

You may be wondering: what exactly are FHA loans, and what are the FHA loans requirements? Aside from that, you might need to know the FHA loans rates as well. The following article is a simple guide for all your FHA loan questions.

First, you must know that FHA loans are the easiest type of real estate mortgage you can qualify for. This is because FHA loans requirements are the most flexible among all mortgage loans that require less than 5% downpayment.

Here are the basic FHA loans requirements:

• You must have had at least two years of steady employment, preferably with the same employer
• Your last two years’ income should be the same or increasing
• Your credit report should typically have less than two thirty-day late payments in the last two years
• Your bankruptcies must be at least two years old, and you’ve had good credit since then
• Your foreclosures must be at least three years old, with good credit since then as well
• Your new mortgage payment should be approximately 30% of your gross income

And finally, you must be aware that FHA loans rates will vary daily, and depending on the state you’re residing in. Many websites have FHA loans rates calculators, usually as a free service offered by FHA loans companies.

There is something that mortgage lenders want San Francisco Bay Area homebuyers to know, and that is that they are now open for business.

It’s a solid fact that it is harder to get a loan now compared to two years ago. However, lenders say it’s possible and fairly easy for borrowers who possess the right credentials. Interested loan candidates only need to prove they can repay the money they intend to borrow.

With the way mortgage rates predictions have been the past few months, where monthly payments on mortgage have been yo-yoing wildly, it’s easy to see why most people have been pessimistic about buying their own homes.

Arlene Allert, a regional manager and vice president at Wells Fargo Home Mortgage, stated that due to the current news headlines on the credit crisis, people think that they can’t get the credit they need to buy the homes they want.

But truth be told, monthly payments on mortgage are definitely reachable, though with a bit more difficulty. There are only three things you will need to qualify for a loan: proof of income, good credit (a score of at least 620), and a down payment (at least 10% in most cases).

Some of the highly influential factors on mortgage rates predictions include Federal Reserve Actions (or usage of Federal funds), and consumer spending (which accounts for approximately two-thirds of all national economic activity). Other factors that contribute are GDP or gross domestic product (another term for national income), consumer confidence, as well as unemployment rates.

As promised last week, we will now discuss home loan modification requirements for borrowers, plus a few tips for those who do not qualify for modification of FHA loans.

Under FHA loans plans, lenders will modify interest rates or forgive part of the principal, in order to bring the ratio of mortgage payments (including homeowners’ association dues), to just 38% of income. FHA home loans need the following requirements for borrowers:

• You must have a home loan on a primary residence that was made before Jan. 1, 2008
• You must contact loan service providers and cooperate on giving needed information from you
• You must be at least 90 days behind on your payments
• You must not have filed for bankruptcy protection
• You must confirm that a hardship (like job loss or illness) has affected your ability to repay, and that you did not purposely default to get a home loan modification

If you don’t qualify for these rules, yet find yourself in financial trouble because of home loans, here are a few suggestions:

• Try the HOPE for Homeowners (H4H), a program created by Congress to help out those who are at risk of default and foreclosure. It is an additional mortgage option that will refinance you into more affordable, suitable loans.
• Contact a respectable credit counseling agency, and find out what your options are besides foreclosure. The Department of Housing and Urban Development (HUD) links to free or low-cost counselors. The National Foundation for Credit Counseling has an online tool that finds members nearest your home.
• Contact your loan service provider to and find out who owns your loan. After which, do call the lender to try to work out a deal.

There are so many other options out there for home loans aside from bankruptcy. Consider those options first before “giving up,” so you may have a bigger chance of keeping your house and retaining a reputable credit score.