Although there are a number of different methods for repaying a loan, there are only 3 types of mortgages: - correct answer FHA insured;
VA
... [Show More] guaranteed;
And conventional.
FHA insured mortgage loans: - correct answer The Federal Housing Administration (FHA) is a part of the U.S Department of Housing and Urban Development (HUD). ***The FHA DOES NOT make loans. Instead, it insures loans made by approved local lenders. The loan is funded by a lending institution, such as a mortgage company, bank, or savings and loan association. FHA provided a variety of loan programs for the purchase of manufactured homes, single-family homes, and multi-family properties.****The purpose of the insurance is to protect the lender from loss in the event of foreclosure.
Although there is no income limits to determine who is eligible for for FHA insured mortgage loans, FHA's mortgage insurance programs help (blank) and (blank) become (blank) by (blank). FHA mortgage insurance also encourages lenders to (blank): - correct answer Low-and-moderate families;
Homeowners;
Lowering some of the costs of their mortgage loans;
Make loans to otherwise creditworthy borrowers and projects that might not be able to meet the conventional underwriting requirements thereby protecting the LENDER against loan default on mortgages for properties that meet certain minimum requirements.
(FHA Insured Mortgage Loan Programs)
FHA Section 203 (b) Mortgage Insurance: - correct answer This program provides basic mortgage insurance for the purchase or refinance of owner-occupied one-to-four family properties.
(FHA Insured Mortgage Loan Programs)
Maximum loan amount: - correct answer HUD limits the maximum FHA insured mortgage loan amounts, which vary by geographic location. Lower cost areas, such as Ocala and Okeechobee have lower maximum loan amounts than higher cost areas, such as Key West.
(FHA Insured Mortgage Loan Programs)
Down payment requirements: - correct answer FHA requires eligible borrowers to have a FICO credit score of at least 580 and to provide a down payment of at least 3.5% of the home's purchase price or appraised value, whichever is less.****Borrowers who have a credit score between 500 and 579 are required to provide a 10% down payment!!!*****Borrowers who have a FICO score below 500 are not eligible for FHA insured financing.
*****The down payment can be from the owner's own funds, from a non repayable gift, or a combination of the two.**The LENDER is required to document any gift funds in a "gift letter".
(FHA Insured Mortgage Loan Programs)
Standard loan-to-value percentages: - correct answer The standard maximum loan-to-value (LTV) ratio for an FHA insured mortgage loan is 96.5%. ***Closing costs associated with FHA insured mortgage loans may be rolled into the loan balance, as long as the loan-to-value maximum guidelines are still met. The [Show Less]