4 Things You Need To Know About Marketing For Fha Refinances
The FHA or Federal Housing Administration is a U.S
. government agency formed as part of the National Housing Act of 1934. The agency aims to improve housing conditions and standards, stabilize the mortgage market, and provide an effective home financing system via the insurance of mortgage loans. Marketing for FHA refinances can be advantageous or consequential depending on the strategies that you employ. Find out the best ways to bring in customers.
1. Know How To Get A Loan.
The FHA is not responsible for making loans, but rather, insures loans made by private institutions or lenders. The first thing you need to obtain an FHA loan is to search and contact mortgage brokers and lenders. Ask if they originate FHA loans then compare the different rates and terms of each.
Next, allow the potential lender to assess your prospect for risks. Your debt to income ratio may also be analyzed, to identify the right type of home and risks that you can afford based on your monthly income and expenditures.
Section 251 insures refinancing or home purchase loans with adjustable interest rates. This helps consumers refinance or purchase homes at a lower starting interest rate. The mortgage insurance programs of the FHA allow families with low or moderate incomes to purchase or refinance homes by adjust the mortgage loans. The lender is also protected against loan default on mortgages for properties such as single and multifamily homes, manufactured homes and health care facilities.
2. Know The Available Programs.
The FHA is part of the HUD or Department of Housing and Urban Development. The HUD is also a federal agency that manages national policy and programs to cater to the housing needs of Americans. Any individual who has good credit standing, available cash to close the loan and enough steady income to afford monthly mortgage payments can be approved and given a mortgage insured by the FHA.
Apply to lenders approved by the HUD to get a FHA-insured loan. The loans are available in both rural and urban areas for single family homes, 2, 3 or 4-unit properties and condominiums. Down payments can be as cheap as 3% with closing costs included into the mortgage. FHA loans cannot go beyond the statutory limit.
3. Know The Price.
Any qualified individual, whether a U.S. citizen or not, can get FHA refinancing. At present, the maximum FHA loan amount is set at $152,362. Some costs that the buyer should know about are down payment, escrow fee, loan origination fee or 1% of the base loan amount, appraisal fee, recording fees, credit report fee, hazard insurance and reserves, MMI impounds (2 months, lenders title insurance policy, property tax proration and reserves, MIP which can be financed 100% and added to the base loan and per diem interest on new loan, based on the date of closing.
The seller should expect a number of costs as well, such as escrow fees, sub-escrow fee, tax service fee, payment of assessments, proration of property taxes, revenue tax stamps which if applicable are around $1.10 per $1,000 sale price, broker fees, structural pest repairs and control, pay off present trust deed and liens, buyers' loan processing fee and buyers' loan document fee.
Client Advantages
4. Know the benefits. For effective marketing for FHA refinancing, understand the various benefits to offer clients. One advantage is easy qualification since the federal government supports the programs so those with blemished credit reports can still apply. Another is low down payment wherein FHA-insured mortgages only ask for a 3% down payment. The additional 3% can be paid in non-cash items. Interest rates can be better compared to other private institutions. Home stability is better when investing in government-supported programs.
There are various products available for FHA refinancing. Non-traditional credit is accepted too with a minimum of 3 trade lines, including a 12-month minimum opening on housing debt. Non-occupying co-borrowers are allowed but when there is a non-occupying co-borrower, the occupying borrowers are not required to have steady income or be employed. Restrictions are present and will apply.
Gift equity, which serves as down payment, is acceptable, provided that the detailed guidelines are followed properly.
by: Scott Tucker
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