Mortgage FAQ

Mar 27th, 2011 | By | Category: The Mortgage Connection

The Mortgage Connection | Mike MorganWhen it come to buying a home, all too often I am asked the same questions from prospective buyers ranging from Credit Score to down payment.  I thought this time around I would address some of the more frequently asked ones to help sort out the questions and put the puzzle pieces together…

By Mike Morgan of Peoples Mortgage Company

What are “HUD homes,” and are they a good deal?
When a HUD (Housing and Urban Development) insured mortgage is foreclosed on HUD takes ownership of the home and sells it at market value as quickly as possible either at action or through real estate companies (Real Estate Owned or REO). These homes can be a good deal.

Can I become a homebuyer even if I’ve had bad credit?
A FICO score of 640 is required for a home loan. If you know that you currently have bad credit and really want to improve your score in order to buy a home you can be referred to a specialist that can work with you to improve your credit score.

What if I don’t have much money for a down-payment?
If you have good credit but you don’t have money for a down payment there may be programs to help you. Contact Family Housing Resources at (520)318-0993 for more information regarding down payment assistance programs and how to qualify.

How much money will I have to come up with to buy a home?

  • There are several answers to this question:
  • You may qualify for a 0 down VA loan if you are currently or have previously served in the US Military
  • You may also qualify for a 0 down loan if you are looking to buy in a specific designated area determined by the USDA

If you don’t fit into either of these scenarios you can purchase a home with as little as 3.5% down. This money can come from your savings, a gift from a family member or down payment assistance as mentioned above. There are also closing costs involved in each type of loan mentioned above which can be negotiated with the seller. Consult with a real estate professional for more information.

WHAT IS A 203(k) LOAN?
It is an FHA loan that allows you to finance up to an additional $35,000 into the mortgage to repair, improve or upgrade the home before move-in.

Can I buy a home if I’ve had a short sale or foreclosure of my conventional loan?
The answer to this question is YES. But again there are many elements to this answer:

  • If you’re qualifying for a new FHA loan and had a short sale (on a conventional loan) and you are buying in the same city you can buy after 12 months.
  • If you’re relocating to a different city and you’ve had a short sale on a conventional loan there is no waiting period.
  • If you’re qualifying for a new FHA loan and you’ve had a foreclosure on a conventional loan then there is a 3 year waiting period.
  • If you are qualifying for a new VA loan and you’ve had a short sale on a previous conventional loan there is no waiting period. But if it was a foreclosure there is a 2 year waiting period for a new VA loan.
  • A new conventional loan is possible after 2 years from short sale and after 7 years on a foreclosure.

There is a lot of information covered here and there are a multitude of possible scenarios so please call me at 520.954.7686 with any questions you may have. I would be happy to discuss your unique scenario or questions with you. Also, feel free to email me at:

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