And buying with an FHA loan is a good idea. You can buy a home in Cuyahoga County borrowing up to $298,000, and the interest rates are always a bit lower than with a conventional loan. I did want to pass on some information about searching for your new home however since there is a difference in inspection requirements between FHA and Conventional.
If you are using a conventional mortgage loan, you might see a home with a floor plan that suits you and at a price you like; it might need some work, but you figure you can get an inspection and then maybe decide to buy it anyway and work on it over time.
If you are using an FHA loan, you might not have the ‘over time’ flexibility. You and your agent will have to look for things that will pass an inspection: the roof will need to be able to be certified as ‘passing’ for a few years time; window jambs will need to be free of peeling paint, as will walls and home exteriors. That doesn’t mean you can’t pay for (as a buyer) or do some of the work yourself, as odd as that may sound. A few years ago a client of mine saw a home she fell in love with; an elderly woman owned it; she had updated and kept up the home so well you could eat off the basement floor. But there were a few issues with peeling porch rails and the garage. She was using a first time home buyer program that required a HUD inspection. I painted the porch along with the home owner, bless her heart and my client’s parents paid to have the garage sided.
You will need to access assess what kind of extra money you might have to do this kind of thing– but for sure, a HUD inspection is more stringent in terms of when the work gets done as opposed to a ‘regular’ or conventional loan that lets you have a home inspection and then decide when you want the work done, before you move in or after you buy it.
I have been thinking about this for a week or so because several of my current buyers are using an FHA program and so I am trying to explain as we see each house, what may or may not be an issue regarding the inspection. Just a Monday tip lol. Peace Out – 3C
0 responses so far ↓
1 Sharon // Apr 8, 2008 at 10:39 am
Great Monday tip Carole! So now I gather a home purchaser would have to search out which lenders fund FHA loans. Is there a convenient way of getting that info?
Sharon’s last blog post..By: chele
2 Carole Cohen // Apr 8, 2008 at 11:25 am
Hi Sharon, I have a draft post that refers a lot to an idea of yours, your ears must be ringing LOL
Anyway, most reputable lenders will be used to doing FHA loans, but a good way to test their knowledge is to ask what FHA programs they are currently recommending.
Secondly, if you are working with an agent, your Realtor® will be able to recommend lenders who are expert in the FHA loans.
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