Article Contributed on: 11/24/2008 4:45:03 PM
FHA loans are one of the best ways to get mortgage financing these days. There are many reasons why, but here are the big ones:
-- You only need a 3% down payment (it goes up to 3.5% in January).
-- FHA loans are for anyone - not just first time homebuyers.
-- The mortgage insurance rates are lower than for any other type of loan.
-- You don't need a specific credit score.
-- The seller can pay up to 6% for your closing costs (more than enough).
-- There are no income limitations.
Let's say you don't have the 3% down payment. Here's how you can get it:
If you have household income that falls below the income guidelines established by the Colorado Housing Assistance Corp. (CHAC) and all the other non-seller-paid down payment assistance programs, then that is the easiest way to get the money for the down payment. There is an assistance program for every county in Colorado.
If you have household income above the guideline limits, then the best way to get the down payment is to have a relative either give or lend you the money. It's OK for the relative to borrow it themselves before they give or lend it to you.
If the money is a gift, then the relative needs to sign a gift letter stating that the money does not have to be paid back.
If the money is a loan from a relative, then they have the option of making it a secured loan (making it a second mortgage), or making it an unsecured loan (the only lien against the property will be the FHA loan).