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MBA Urges Regulators To Avoid Invoking Suitability Standards
The Mortgage Bankers Association (MBA) recently made a preemptive strike against what it obviously perceives as the next threat against the mortgage industry - "suitability standards." Read more...

 

The Fha And Mortgage Programs

All first time homebuyers should know that there are several mortgage programs available out there meant to help you get you into the house you deserve at mortgage terms that you can afford. Before you begin your search for your first home make sure that you understand all of these different mortgage programs and work with your mortgage lender to take advantage of them.

The biggest resource for mortgage programs for first time home buyers would be the Federal Housing Administration or FHA. The FHA works by providing private mortgage lenders with guarantees against the loan that you take out with them. By doing this, they help home ownership become a reality for many individuals who don't have perfect credit or who don't have the finances to otherwise afford the hefty up-front payment sometimes required to buy a home.

The process of applying for FHA mortgage programs is pretty much the same as applying for a conventional mortgage program. You will need to provide verified proof of your income over the past three years, however what qualifies as income is relaxed a bit. Social security, alimony, rent paid by other family members and such qualify as income under the FHA mortgage programs. In addition, short-term debt won't count against you; short-term is defined as being able to be paid off in less than ten months.

With FHA mortgage programs you'll be allowed to use up to 29 percent of your total income towards housing costs and up to 41 percent towards housing expenses and other long-term debt obligations. Again, it is up to the homeowner to make sure that they can afford the home they wish to buy. Just because the FHA relaxes the restrictions doesn't mean you should buy a home that you'll have to struggle to afford each month.

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