SAHBA Home Hints
April 20, 2008
FHAs Make a Comeback, But are They Right for You?
Mortgages. There is something about the word that seems like it would fit better in an obituary. But selecting a mortgage is not as morbid as that perception. Well-informed borrowers and principled lenders can work together to find mortgages people can live with.
In the last year, the lending and borrowing game has changed greatly. Some loans have been phased out while others have been retooled.
“Many programs that existed prior to November 2007 are no longer around,” said Charles Moore, Loan Officer at Nova Home Loans.
But the new home sales market continues and there are many qualified buyers. These buyers are finding that when it comes to mortgages, going back to basics may be better. FHA (Federal Housing Administration)-Insured Loans have made a huge comeback this last year.
“FHAs are sort of the anti-sub prime. They are fixed-rate mortgages with no pre-payment penalties,” said Lance Dickson, Nova Home Loans Chief Operating Officer. “FHA was the tortoise while the rest of the market was running like the hare, and now it has caught up.”
This fixed-rate mortgage allows borrower to finance up to 97% of the home.
In Pima County, the FHA loan amount maximum for a single-family home increased by $76,400 due to the Economic Stimulus Act of 2008. The increase has been approved through December 31 and could open a larger market for borrowers.
Southern Arizona FHA loan amounts:
• Pima County: $316,250
• Pinal County: $346,250
• Yuma County: $271,050
FHA loans were designed to benefit people who want to purchase a home, but may not be able to put away money for a down payment. Recent college graduates or newlyweds often consider FHAs. The loan also serves individuals whose credit has been marred by bankruptcy or foreclosure.
It's always important to remember that individuals and their lifestyles will affect what type of mortgage is suitable.
“We put the consumer in the right product,” said Dickson, a SAHBA member. “We're not arbitrarily steering everyone to FHAs, we make sure they get what works for them.”
The FHA has incorporated a range of loans. The following are covered: Adjustable Rate Mortgages, Fixed Rate Mortgages, Energy Efficient Mortgages, Graduated Payment Mortgages, Mortgages for Condominium Units, and Growing Equity Mortgages.
Details: Moore at (520) 577-476 and Dickson at (520) 750-8888.
SAHBA represents about 750 member businesses and 40,000 jobs serving the residential construction industry in Pima and Cochise counties.
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