December 28, 2018
Published reports coming in at the end of the year suggest that renters paid $13 billion more in rent in 2018 than in the previous year.
The amount of money spent on rental housing in 2018 is higher, but in spite of this some sources point to a slowdown in rent hikes, saying that a stalling of rent hikes could bring down payments closer to some potential borrowers.
The ability to save more each month toward a down payment can make a big difference in the timing of a new home loan, especially an FHA mortgage that requires only 3.5% down.
FHA loans, like conventional mortgages, have a down payment requirement. But FHA loan down payments can be lower and also be supplemented by down payment grants or gift funds. The gift funds must meet FHA standards for sourcing and must not result in cash back to the borrower at closing time. They must also be an actual gift with no expectation of repayment.
The ability to save more each month toward a down payment can make a big difference in the timing of a new home loan, especially an FHA mortgage that requires only 3.5% down. FHA loans, like conventional mortgages, have a down payment requirement. But FHA loan down payments can be lower and also be supplemented by down payment grants or gift funds.
Is 2019 the year to stop renting and start looking at a home? Potential buyers have a variety of options with an FHA mortgage including having a house built to suit using an FHA One-Time Close construction loan.
The One-Time Close loan is different than some construction loan options because it only requires a single loan application and closing date; once the loan is approved the borrower will be able to rest assured that the construction phase of the mortgage is paid for and the mortgage itself is not subject to a second round of credit checks and approval procedures.
Other home loan options available to renters is the FHA Rehab Loan, which lets financially qualified borrowers purchase a house as a fixer-upper with FHA loan funds to both buy and rehab the property.
There are FHA Condo loans, FHA mortgages for manufactured homes, and you can refinance an existing non-FHA mortgage into an FHA loan. Borrowers who are tired of renting and want to invest their money in a home that will grow in equity and be financially viable in the future should explore their FHA mortgage loan options to see which one is right for the type of purchase desired.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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