FHA and VA loans are special programs backed by the government. They require little to no down payment and are designed to get first-time homebuyers into homes. Rates are often lower than other loan programs.VA Loans are especially beneficial for purchases. Due to the VA Funding fee (typically 3% of the loan), ask your mortgage professional if a VA Loan is right for you in the case of a refinance.
An FHA loan allows you to buy a house with as little as 3% down, instead of the higher percentages that may be required by many conventional loans. Taking advantage of the FHA loan program is a great way for first time buyers to buy a home.
VA loans are only available to those veterans who receive their elligibility certificate from the Veterans Administration.
Although these loans offer low-down payment programs and other assistance, the interest rates are typicallly non-competitive with Fannie Mae conforming loans. VA loans are also often limited in the amount that a person can borrow.
In today's market, many lenders offer mortgage programs that are at least as attractive as the FHA/VA loans. So even if you don't qualify for one of these programs, your mortgage professional can likely offer you a financing option with very similar, if not better, terms.
Even in the rare situations where subprime loans are still available, rates are no longer comparable to FHA loans - even when you consider the mortgage insurance added to the payment each month. Most importantly, no subprime loan program has the streamline refinance program offered on FHA loans. As long as you are up to date on your payments, an FHA loan can be refinanced without having to requalify. Sometimes there is not even a requirement for an appraisal.
FHA and VA loans have a distinct advantage over subprime loans which were readily available over the past few years. Namely, they are still available, and will continue to be available and to improve as time goes on, as they are true government loan programs which do not rely on Wall Street for their funding.
With the tightening of credit standards recently, Government Insured loans such as FHA and VA loans are still readily available. Many of the subprime companies that offered alternatives to FHA or VA financing have gone bankrupt. Call, Michael R. Byrne, a Government financing specialist today at 1-800-999-2489 x7972 or [e-mail].
