Buying a home is like fulfilling one of the biggest dreams in life. In New York, home mortgage loans are offered in various forms to the buyers. Having sufficient knowledge of each type can save a lot of the buyer’s hard-earned money. If a person is not eligible for obtaining a conventional loan, he can also opt to take out an FHA mortgage. Recently, the FHA has introduced some new rules that have been applied in the year 2010.
There has been a substantial increase in the upfront insurance premium for FHA loans. The new premium percentage has increased from 1.75% to 2.25%. For every $100,000, the borrower needs to pay an additional fee of $500 towards closing costs or he can pay a total of $2,250. The amount will become double if the loan amount taken is $200,000.
In New York, home mortgage loans are not directly offered by the Federal Housing Authority. The FHA gives a guarantee of repayment to the lenders, in case the buyer fails to repay the loan. Some of the types of FHA loans are as follows:
* General FHA loans: A person can obtain this type if he has a low credit score and cannot afford to pay 20% down payment. The loan term ranges from 10-30 years. The loan can be either a fixed rate or an adjustable-rate one.
* FHA HUD loans: Those who want to buy an FHA foreclosure home can obtain this loan. This program offers a minimum down payment, which can be as low as $100. The buyer also gets a small amount of repair escrow account, if the home needs repair and also closing cost assistance up to $2,500. The loan term ranges from 10-30 years. The mortgage rate is fixed.
* VA loans: This loan is offered to military veterans. No down payment is needed and the interest rate is 1% less than the current market rate. The loan term ranges from 10-30 years. The buyer needs to pay a 1% funding fee during the closing of the loan process. The property and insurance taxes are factored into an escrow account.
* SPARC: It is a low-interest loan provided by the Sponsoring Partnership and Revitalizing Communities, through the local government, housing authorities, non-profit organizations, and so on. These organizations merge different types of loans offered by the local, state, and federal government and offer them to the borrowers.
If you want to avail of FHA loans, log onto www.getlowrate.com. This New York home mortgage company specializes in real estate financing related services. After evaluating your financial conditions, the loan consultants will help you choose the best mortgage type, to suit your repayment affordability the best.