Introduction
Federal Housing Administration loan is a mortgage for low-medium income earners issued by lenders who are approved and insured by FHA. It offers loans of up to 96.5 % of the total value of a home with very low down payments of about 3.5% making it easy for people living in Laredo to become homeowners. FHA requires two types of mortgage insurance premiums-Upfront mortgage Insurance Premium (paid upon purchase) and Annual Mortgage Insurance Premium (paid monthly. The FHA was as a result of poor housing state in the US as most people were renters with only40% homeowners. The introduction of FHA in Laredo has led to an increase in the number of homeowners there. This is because of the additional types of FHA Loans include;
Home Equity Conversion Mortgage
A Home Equity Conversion Mortgage is a type of FHA insured the reverse mortgage. this means that it can be reversed whereby a person’s equity is converted into cash depending on the value of their homes. However, this type of FHA loan is limited only to people who are elderly and at the age of 62 years and above. In addition to this, there are no payments made after the interests have accrued on the loan balance until the borrower either sell the home or upon his or her death. Other than age, the applicant also has to complete a standard application form so as to provide relevant information.
Energy Improvement Mortgage
This is a type of FHA loan in loredo that enables the people living in Laredo to acquire loans that are meant for improving energy efficiency in their homes. Borrowers acquire loans from regular lending companies such as banks and other lending institutions though they have to undergo an energy efficiency assessment which results in a list of cost-effective improvements that meet the standards. The advantage of the Energy Improvement Mortgage in Laredo is that borrowers can improve their homes energy efficiency without any increase in the down payment hence making it affordable to the low-income earners who may not have enough money to pay as down payments.
Graduated Payment Mortgage
This is a fixed-rate mortgage hereby the payments increase with time from the time it is acquired. This type of FHA has greatly helped the youths In Laredo whose income gradually increases as they are able to acquire homes due to the low payments involved at the beginning of purchase. This type of loans attracts a wide range of people due to its low interests at first especially the youths in Laredo who wish to become homeowners.
Conclusion
To conclude on the types of FHA loans in Laredo, it is evident that it is easy for one to own and maintain a home there since the types are all favourable. For example, one can use the graduated Payment Mortgage to acquire a home and the Energy Improvement Mortgage to maintaining energy efficiency.
