Mortgage Help from State and/or Local Governments
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It is a nightmare to someone who experience having a trouble in paying their mortgage payments. The risk of losing a home due to financial problems is a troublesome that likely happen to a household with a limited income. Other also face mortgage problem when you took out a mortgage that has a fixed rate for the first two to three years but suddenly had an adjustable rate that will give your puzzle-like look whether you are capable of paying that high mortgage. Hence, there are various government agencies and private institutions that offers Home mortgage loan in an affordable rate.
However, you must recognize the fact that there are scams and frauds you must avoid in order to save your home to foreclose. The Federal Trade Commission (FTC) of the U.S. Federal ensures that homeowners have consumers’ protection agencies that would help you and be a shoulder to rely on along mortgage anxieties. If you are decided to get a Mortgage loan, then you must read this note to give you glance on the must-know about Home mortgage loans and its important aspects.
Department of Housing and Urban Development (HUD)
Under the HUD, the FHA’s mortgage insurance program also known as the Mortgage Insurance for One to Four Family Homes (section 203 (b)), aims to help the low and moderate income household to have access to an affordable housing. On this program, it helps the homeowners to acquire lower-payments of mortgage loans.
In this way, FHA-insured mortgage product, the homeowners can avail low interest rate and monthly payment. However, these may change along the duration of the loan. For instance, under the insurance adjustable rate mortgage of section 251, the HA may require that the down payment for the housing unit can be as low as 3.5%.
In this case, it gives an opportunity to the low and moderate income families to borrow from the FHA insurance to finance up to 96.5 of the housing vale purchase the mortgage loan program. With this features, the homeowners have change to finance other mortgage cost such as the up-front cost of the house.
On the case of adjustable mortgage rate, the FHA uses the Treasury Constant Maturities Index in order to find he interest rate changes. From time to time or at one year, under the FHA mortgage loan, the maximum amount of the interest rate may increase or decrease by 1 percentage point. Over the life of the loan, the maximum interest rate may change from its initial rate at 5 percentage point. Take note that that it is right of the borrower under the protection of the consumer’s right to know the terms of the Adjustable rate mortgages during the application period.
With this federal mortgage program, it requires the borrower to pay the up-front insurance premium which could be financed on the time of the housing purchase. The borrower must ensure that homeowners are liable to pay monthly premiums which are not financed but instead, it is added up to the regular mortgage payment as stated on the contract. You can contact your local HUD office to know more about this program or visit the portal.hud.gov.
Making Home Affordable Program
This Making Home Affordable Program, still under the HUD, offers prospects to the eligible homeowners who are applying for home mortgage loan to modify or refinance their home loan in affordable monthly payments. Under this program is the Home Affordable foreclosure Alternatives Program that deals to the homeowners who are interested in the deed-lieu or short sales of the foreclose. You can contact the number 1-888-995-4673 and ask for more information about this mortgage loan opportunities and modifications.
Aside from the opportunities that the federal offers for an affordable home mortgage loans, it is also necessary for the homeowners to learn the importance of mortgage payments also the strategy to avoid predatory lending or shark loans.
Know your Mortgage
Sometimes, homeowners don’t even know what type of mortgage they have. There are also instances that consumers don’t understand the mortgage documents that they received and just pass by the important agenda like the mortgage payments and chance of increasing its payments. Here are the types of mortgage that you must know.
Hybrid Adjustable Rate Mortgage: This type of mortgage also called the hybrid ARM is a Mortgage that have a fixed payments for the first few years but as time flies, it turn to be an adjustable loans. It can be refer as a 3/27 hybrid ARMS wherein the first number indicates the years that mortgages payment has a fixed rate while the second number indicates the supposed years of the loan that has an adjustable rate. On the hand,hybrid ARMs may also be like 5/1 or 3/1 wherein, the first number refers to the time or yeas when the loans has a fixed rate while the second number refers denotes on how frequently the rate changes depending on the contract.
Adjustable Rate Mortgage (ARMs): It indicated on you contract that your mortgage payments have an adjustable rate from the beginning which your payment may change habitually.
Fixed Rate Mortgage: The Mortgage has a fixed rate for the long period of the loan.
With these types of mortgages, it is known that when you have an ARM and a Hybrid ARM, there is an assurance that your regular mortgage payments will increase and has a possibility of making troubles to pay the increase rate. By this, you must find out if you can handle to refinance the mortgage payments into fixed rate. Along of considering many options, you must review the contract and check the possible prepayment penalties.
How to avoid predatory lending and shark loans
Better to attend a homeownership education course offered by the HUD and other non-profit counseling agencies before taking the risk of purchasing a house.
You must consult different real estate professionals or agents and check their references before you select a house.
Get enough information about the houses prices. Always remember to check different neighborhood to avoid paying too much.
Don’t be fooled on your first glance on the house, you can hire a qualified and a professional home inspector that will scrutinize the whole property including the repairs and other household renovations.
Check several lenders and compare the cost. You can consult the HUD office of Housing Counseling to get the full list of the accredited lending in your area.