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3% Down Payment Program… We Like It!

Posted on: May 17th, 2013 by admin No Comments

Typically when we see the phrase “3.5% Down Payment Only” we think of the FHA program. This FHA program is considered the “Saving Grace” for many First Time Home Buyers. Because the underwriting guidelines are not as stringent as Conforming Loan Programs. The credit score required for an FHA loan can go down to 600 with some lenders and still gives a borrower a nice interest rate. The FHA program is for 1 to 4 family homes, townhouses and FHA Approved Condos.

But due to recent changes to the FHA Program the monthly mortgage insurance required on all loans with less than 10% down payment is now required to stay on an FHA program for the full 30 Years. (OUCH) The cost is 1.30% of your borrowed loan amount then divide that amount by 12 month. For example borrow a $300,000 mortgage x 1.30% = $3,900 divided by 12 month = $325 a month for 360 month (30 years)= $117,000. if you kept the mortgage for the whole term. (OUCH).

But don’t worry, FHA’s Low down payment program is not the only game in town.

There is a Conventional Fannie Mae Program at “Faze One Funding, LLC” which offers it through their third party lender. When putting a down payment of only 3% your borrowing 97% from the lender. The monthly mortgage insurance payment goes away after 2 to 3 years or when the loan-to-value reaches 80%. This scenario is much better than the monthly mortgage insurance payment staying on for the duration of your mortgage on an FHA loan. The credit score requirement for this program is 620 and the down payment can be a gift from blood or by-marriage relatives. Right now this 3% down conventional program is only for single family homes (attached or detached) townhomes, condominiums. The maximum loan amount you can borrower is $417,000.

We like this program a lot at Faze One Funding, and feel it is a great alternative to the FHA Program.

Faze One Funding Refutes Reverse Mortgage Myths

Posted on: April 17th, 2013 by faisal No Comments

It is unfortunate, but there are quite a few myths surrounding reverse mortgages. For this reason, many people never look into this way of bettering their financial situation. Once you are aware of these myths, as well as the truths that refute them, you will be in much better position to make an informed decision.

Here are several of the most common reverse mortgage myths:

The lender will own your home.  For whatever reason, this has quickly become the biggest reverse mortgage myth out there. During the entire course of the reverse mortgage you or your estate retains ownership – the lender never takes over the title. Just like a traditional mortgage, the lender is only interested in the outstanding balance.

You need to make a lot of money and have great credit to qualify.  This is definitely a myth. Simply put, there are no income and credit requirements in place. The entire process is hinged on your age, value of your home, and location. Believe it or not, you can even qualify for a reverse mortgage if you are going through bankruptcy.

You have to make monthly payments.  One of the benefits of a reverse mortgage is you are never asked to make a single payment. The only payments that are made will be coming from the lender to you. That being said, the homeowner is still responsible for the upkeep of the home as well as taxes and insurance.

You must be debt free.  Every year, many people with a lot of debt qualify for and take advantage of a reverse mortgage. Even if you have a traditional mortgage on your home you can still quality for a reverse mortgage. Many people find this hard to believe, but it is true – your debt does not matter. It is important to note that if you have a traditional mortgage the loan must be paid off with the proceeds of the reverse mortgage. From there, the remaining amount is distributed to you.

They are only for cash poor seniors.  While those with little cash can definitely benefit from a reverse mortgage, there are others who also find this to be a great idea. Many people are interested in staying in their home, but using it to fund their retirement. Along with this, there are always going to be people who just like the security of having cash on demand.

You have to take the money in one lump sum.  This is not true. With a reverse mortgage you can opt to receive your proceeds in many ways including: term, tenure, line of credit, modified term, modified tenure, or a lump sum.

These common reverse mortgage myths stop many people from moving forward. Now that you know the truth, you are in better position to decide if this financial decision could benefit you. Don’t let any of these myths hold you back from applying for a reverse mortgage.

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