FHA loans are administered by the Department of Housing and Urban Development (HUD). There are many FHA lenders in the Greater Walnut Creek area. Private Mortgage Advisors, the in-house lender of Alain Pinel Realtors does a great job. Christina Stratton, the lender in the Walnut Creek branch is well qualified to do these mortgage loans.
As a result of lending institutions tightening their lending guidelines the last few years and requiring larger down payments on home mortgages, FHA loans have gained popularity with first time home buyers because of their low minimum down payment requirement of 3.5%. Borrowers who do not have a large down payment saved are opting for an FHA mortgages which give them more flexibility and allow them to attain home ownership sooner.
- The source of the borrower’s funds may come from a gift, savings or checking account, IRS, 401(k), bonds, stocks, employer assistance program, funds from proceeds of a prior sale, a disaster relief refund or grant or tax refund.
- All borrowers must purchase FHA mortgage insurance. The insurance protects and insures the lender in case the borrower defaults on their loan.
- Credit scores average 620 for most lenders.
- There are no requirements for cash reserves.
- No pre-payment penalties.
- A 30 year fixed loan is available.
FHA loans are a great alternative to traditional financing especially for first time home buyers, many of whom have a steady income, but don’t have a large down payment required for a traditional home mortgage. A FHA loan solves this problem because borrowers only need a 3.5% minimum down payment. This way borrowers can use any extra cash beyond that for rehabbing or decorating costs. Also, with an FHA loan, FHA permits the seller to pay the buyer’s nonrecurring closing costs up to 6% of the purchase price of the property. This feature allows the buyer to save substantial amounts of money. Walnut Creek, Contra Costa County, California FHA loan limits are as follows–as of March 18, 2011:
- $729,750 for a single family home
- $934,200 for a duplex
- $1,129,250 for a triplex
- $1,403,400 for a four-plex
For interest rates and more information on FHA loans, you should check with Christina Stratton at 925-627-3025 or your approved FHA lender.