MortgageLoanPlace.com - Source for FHA Loans
At http://www.mortgageloanplace.com/blog/ there is a post, Will Sub Prime Loans be Replaced by FHA Loans (Federal Housing Administration), that relates to sub prime loans and FHA Loans. This post outlines the worry that FHA Loans may be replacing sub prime because they are an easier option for those that have bad credit or low incomes.
Another blogpost at http://www.mortgageloanplace.com/blog/, Down Payment Assistance May Go, illustrates how the government is thinking of removing the down payment assistance that is available for people who have no money to put down to get a house of their dreams. The government believes that people who use this programme as more likely to default on their mortgage This is because FHA Loans have a foreclosure rate of 3% whereas those that use the down payment programme are paying 6.5% so I can understand why it is easier to default on that route.
This could mean a worrying time for homeowners who await the changes that are afoot. Some people are taking the plunge now and are applying for the loans before they are removed. However does this mean, that now housing is more affordable to get, will people get their dream home and a couple of years down the line be unable to afford it.
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