Articles in Category: Adjustable Rate Mortgage

January 27, 2011

FHA ARM Loan Options

First time home buyers interested in FHA loans are often directed to the HUD official page where they can explore options on FHA loans. Some of the FHA's "for more information" links point to the FDIC official site, which has information on interest-only mortgage loans and option-payment adjustable rate mortgages. The FHA still insures ARM loans, which some borrowers choose because the FHA version of an ARM loan is more tightly controlled than a conventional version or a convention sub-prime loan. Those who want to purchase a home but may still wrestle with budget issues in the early years of home ownership often look to ARM loans and/or interest only mortgages as an alternative.

December 29, 2010

FHA Home Loan Down Payment Rules

By Joe Wallace

Most FHA home loan programs require the borrower to make a minimum down payment of 3.5% of either the appraised value of the property or the asking price of the home, whichever is lower. The downpayment is strictly regulated. The buyer is not only required to put down his or her 3.5%, but the FHA also requires documentation on the source of the down payment money in many cases. Documentation is required when the borrower pays more than 2% of the sale price. It's also required in any situation where the lender has certain questions about the down payment. According to FHA requirements, documentation is needed when the down payment "appears excessive based upon the borrower

November 30, 2010

FHA ARM Loan Basics

By Joe Wallace

The FHA offers an adjustable rate mortgage, also known as an FHA ARM loan. These loans offer an introductory interest rate which is subject to change after the initial fixed rate period. That period varies depending on the loan--there are hybrid ARM loans available that feature different periods--but once the introductory rate period has elapsed, the adjustable rate is subject to a cap that applies either year-to-year or over the lifetime of the FHA loan. The initial interest rate is often lower than the fixed rate of conventional home loans, which is why many people consider ARM loans even in spite of the fears generated by the housing crisis of 2008.

November 30, 2010

FHA Adjustable Rate Mortgages

By Joe Wallace

There are two basic types of mortgages new house hunters should know about when shopping for FHA home loans; fixed rate FHA mortgages and Adjustable Rate Mortgages or FHA ARM loans. The FHA Adjustable Rate Mortgage is exactly what its name implies--an FHA home loan with an interest rate that can be adjusted up or down according to FHA requirements, the market and other factors. Thanks to the 2008 housing crisis, many soon-to-be homeowners are skeptical about adjustable rate mortgages whether offered by the FHA or not; FHA adjustable rate terms are definitely more predictable in some ways than their conventional loan counterparts. One of the reasons for that predictability is the ARM interest rate adjustment cap imposed on the loan. The cap protects the buyer from large swings in | more...