An FHA Loan is the perfect mortgage for a First Time Home Buyer in Catonsville or Arbutus- Halethorpe or any city or town in Maryland says Adrian Citroni a Mortgage Broker in Catonsville.
An FHA loan is one type of government-backed mortgage that permits you to purchase a home with slackened financial requirements. You may qualify for an FHA loan even if you have a lower credit score or higher debt ratio. Many times you are able to secure an FHA loan with a bankruptcy or some other financial blemish on your record.
An FHA Loan is insured by the FEDS against default. That means it is a mortgage backed by the government. The FEDS in this case is the Federal Housing Administration. In other words, the FHA guarantees that a lender won’t get screwed if the borrower defaults – the FHA will pay the Lender, however, that means the taxpayer will get stuck holding the bag, as usual. FHA is the first time home buyers’ dream because it requires lower minimum credit score, a lower down payment than the usual conventional loans, and the total amount of the down payment can be gifted. So if you do not have any savings but a generous relative, you can be in like Flynn.
How Much Down?
As Low as 3.5%. Down
Who can get an FHA Loan?
Just about anybody with a credit score of at least 620.
Lower Score is accepted with Additional Down Payment
FHA loans offer a few other bells and whistles:
- 3.5% down payment required on purchase
- Easier to use gifts for down payment and closing costs
- No prepayment penalty
- Financing for home improvement using FHA 203k programs.
- Gender Neutral
THE GIFT
Whoever prvides gifts money for a down payment on a house, has to write a Gift Letter.
Eligible donors can include family members, friends, labor unions and employers. Charitable organizations can also make contributions toward a down payment. Down-payment assistance programs for eligible homebuyers; including first-time and low-income buyers, can also be utilized .
PROHIBITED DONORS from down-payment money gifts :
- Real estate agents or brokers
- Sellers
- Homebuilders
- Anyone with a vested interest in selling the house
GIFT LETTER: It can be a templated statement explaining just the facts:
- who is the donor,
- giver’s contact information
- Amount of the Gift
- the source of the funds
- No expectation of payback
- The letter must indicate when the funds were transferred
- Both the donor and the homebuyer must sign the un-notorized letter
PAPER TRAIL: The Lenders will also want proof that the funds were transferred and received. The paper trail should include:
- A copy of the gift giver’s check or withdrawal slip
- the homebuyer’s deposit slip
- A copy of the gift giver’s check to the closing agent if directly made
- A settlement statement showing receipt of the donor’s monetary gift
- Copy of certified check
- Proof of wire transfer
HUD Settlement Costs and Helpful Information:
ADRIAN CITRONI - MORTGAGE BROKER
Primary Service Area: Catonsville & Vicinity
Academy Heights, Arbutus - Halethorpe, Catonsville, College Hills, Elkridge, Ellicott City, Oella, Westchester
Licensed Loan Originator NMLS# 144522; MD - DC - PA - DE - VA - FL - CA
CALL OR TEXT: 410-916-0776