The lower down payments and lower interest rates of FHA and VA loans have helped many afford a home.
Federal Housing Administration (FHA) Loans: Available to most first-time homebuyers, FHA mortgages allow you to move into your new home with less out-of-pocket cash than required with most conventional loans. The federal government insures these loans to make home ownership affordable to people with modest means who can’t afford large down payments.
Veterans Affairs (VA) Loans: Available to veterans of the armed services, active-duty personnel, reservists, and their spouses, VA mortgages require no down payment and offer some of the easiest qualifying requirements of any home loan.
Foreclosures aren't just happening to people who over-leveraged themselves and got risky loans. They are happening to people of all walks of life who are experiencing major life changes. Fourclosure is a situation facing hundreds of thousands of people and the numbers are growing rapidly. If you think you are in danger of facing foreclosure, you can call the 888-995-HOPE hotline – Homeowner's HOPE(TM) and talk to a counselor who can help you assess your current situation and map out a solution.
What if You Cannot Pay Your Mortgage? Call your mortgage company now! As soon as you realize that you are unable to make your payments, talk about your circumstances with the mortgage company to which you send your monthly mortgage payment. Your options to retain your home are most effective when you are only one or two payments behind.
Generally, if your down payment is less than 20% of the price of the home, you will be required to purchase Private Mortgage Insurance (called PMI or sometimes MI). This protects the lender if you should be unable to pay off the loan.
Federal law requires PMI to be cancelled under certain circumstances, for example when you have paid off a certain percentage of your mortgage or your home’s property value has increased to a certain percentage above the value of the mortgage. Contact your lender for specific information about the status of your private mortgage insurance.