South Lake Tahoe Real Estate Buyers Should Consider FHA Loans

An FHA loan is a loan that is funded by an FHA approved lending institution and insured by HUD. FHA loans are a great option because the interest rates are low even though the loan to value ratio can be high. Borrowers can put as little as 3% down! FHA loans are great for first time home buyers and buyers with less than perfect credit.

With an FHA loan the borrower is responsible for paying a mortgage insurance premium. The mortgage insurance protects the lender if the borrower defaults. The premium can cost 1.5% of the loan amount and can be financed into the mortgage. The borrower will also be responsible for an annual mortgage insurance cost of .5%. The annual mortgage insurance will only be required until the loan to value ratio reaches 78% or less. 

 Here are some other facts about FHA loans

• The maximum mortgage payment to gross monthly income ratio is 29%
• The maximum total amount of recurring monthly debt and recurring installment debt to gross monthly income ratio is 41%.
• You can purchase a home in need of repairs and finance the repair costs with the mortgage. This is a great  option if you are considering buying a foreclosure in South Lake Tahoe due to the fact that many of the foreclosures are in need of some kind of repair. Click here to view a list of foreclosures in South Lake Tahoe currently listed on the South Lake Tahoe MLS.
• Buyers can purchase a home with as little as 3% down.
• A termite report is required, and all section one and section two termite work will need to be repaired.
• FHA has a loan program for condos, variable interest rate loans, and loans for making the  home energy efficient.
• FHA loans are for your primary residence.
• Visit the HUD website for more information about FHA loans.

Currently there is a large inventory of homes for sale in South Lake Tahoe on the South Lake Tahoe MLS. An FHA insured loan may be a great resource for buyers to take advantage of a buyers market and own a piece of Tahoe!

For more information about Real Estate in South Lake Tahoe, homes for sale in South Lake Tahoe, or the South Lake Tahoe MLS, please contact Brent and Jill Johnson today!