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For some Northern Virginia Homebuyers - FHA loans may be the best alternative
By robertearl | April 20, 2008
When the new Federal Housing Administration loan guidelines were discussed, many in the real estate industry expected it would nudge the slumping Northern Virginia housing market by creating new buyers and save many homeowners from foreclosure.
After about a month of exposure, the reality is that FHA loans won’t help many people, but are the best alternative for those struggling to buy or refinance and first time homebuyers.
Jay Damato, owner and broker of Elite Financial in Walnut Creek, CA, did a hypothetical $500,000 loan with 10 percent down and a 680 credit score, & said that the FHA jumbo monthly payment was $3,152 with mortgage insurance versus $3,264 for a similar Fannie Mae loan.
He said the problem is that Fannie Mae, like conventional lenders, do tier-pricing and require higher credit scores. “Lenders really want you with more than 600 credit score. If it’s less, you better have a darn good reason,” he said.
With an FHA loans, many times you can come in with little money down, lower than a conventional loan and FHA is more forgiving of credit scores.
Topics: Buy a Home, First Time Buyer, Northern Virginia Real Estate, Robert Earl |