Low Down Payment Mortgage

Summary: Here is a low down payment home loan that is easy to get and it is available to most mortgage borrowers at low interest rates

You would be wise to look at FHA Mortgage Loans.

They are one of the best mortgage loan products available, and they always have been.

FHA Mortgage Loans are typically more flexible and thus more available than conventional mortgage loans.

An FHA loan is the easiest type of real estate mortgage loan to qualify for.

FHA Mortgages are low down payment loans for all home buyers. They require as little as a 3.5 percent down payment.

Hefty down payments stop most potential buyers from buying a used home or a new home.

They might be well able to afford the house, they just don't have, or want to part with a large amount of cash.

If the house below were selling for $348,500, you would need $69,700 as a down payment on a conventional mortgage loan.

With an FHA mortgage loan, you would only need $12,197 as a down payment.

That's a big difference in "cash out of pocket.

Here's how the loans would differ:

20% down, conventional mortgage: (4.25% interest, 30 years, property taxes excluded)

Down payment: $69,700

Total loan amount: $278,800

Monthly principal and interest payment: $1,372

3.5% Down, FHA loan: (4.25% interest, 30 years, property taxes excluded)

Down payment: $12,127

Total loan amount: $339,787

Monthly principal and interest payment: $1,672

Mortgage insurance: $326 (Mortgage insurance, called Private Mortgage Insurance, or PMI, is required with less than 20% down*)

Total monthly payment: $1,997

True, the lower down payment with the FHA loan results in a mortgage insurance premium of $326.

However, once the house increases in market value so that you in effect do have 20% down, you can apply to have the mortgage insurance dropped.

Since FHA loans adhere only to FHA credit qualifications, they offer options for:

* First time homebuyers (you don't have to be a first time homebuyer).

* Seniors.

* Homebuyers who don't have a lot of money for a down payment.

* Homebuyers can use gift money from family members as part of their down payment.

* Homebuyers who have the money but don't want to use it for a down payment (smart).

* Homebuyers who want to keep monthly payments as low as possible (who doesn't).

* Homebuyers who don't want their monthly payments going up (who does).

* Homebuyers who don't have perfect credit.

* Anyone buying or refinancing a home.

FHA loans are also assumable to buyers!

Note: If you shop for a mortgage on your own, each mortgage lender will order your credit report and regardless of what others tell you, that will drag your credit score down.

However, if you have a mortgage broker shop for you, only one credit report need be ordered!

By the way, FHA.com is a group of knowledgeable counselors that make getting an FHA mortgage loan fast, easy and convenient. They offer complimentary pre-approvals so that you can shop for a home with confidence.

Carl Heldmann

*Read these two articles on how to get rid of PMI:

1. How Do I Get Rid of My PMI?

2. FHA Requirements: Mortgage Insurance.