Honolulu Condos

Mortgage For Your Honolulu Real Estate, Consider FHA First - by Guest Writer

Tim O'leary, with Wells Fargo Home Mortgage of Hawaii, is someone I consider a friend, as well as someone who I believe offers a high quality level of service and loan product.  He has graciously offered to contribute an article from time to time about, of all things, mortgages, lending and related subjects.  Please enjoy his first contribution:

In 1965, the Department of Housing & Urban Development, HUD was formed.  Under HUD operated & operates today as the Federal Housing Authority, known as the FHA.  HUD's goal, through the FHA, was to increase homeownership across America.  It was a major breakthrough in lending allowing potential home buyers to put as little as 5% down payment and lenders would be willing to lend money with the assurance that the federal government would ‘insure' the loan to difference in the event a borrower would default on a loan. 

With today's financial uncertainties, FHA has been the ‘darling' of mortgage lending.  Conventional lending woes created through the many problems at Fannie Mae & Freddie Mac, has made traditional lending much more restrictive.  Below is a comparison of FHA and Conventional mortgages.

Down Payment

FHA- as low as 3.5% down

Conventional- 10% down

Credit Scores

FHA- as low as 620 without pricing additions.

Conventional-  Minimum of 680 and ‘Pricing Tiers' beginning at 739 scores.

Funds for closing requirements

FHA- entire down payment may be a gift

Conventional- Borrower must have a minimum of 5% of their own funds in the transaction

Mortgage Insurance

FHA - 96.5% financing uses a factor of .52% & charges 1.75 Premium for a Single Family which can be financed, making it tax deductible.

Conventional - No upfront Premium, but a much higher monthly factor which increases your long-term monthly payments

Refinance Streamline Program

FHA- Allows for a Streamline Refinance without an appraisal.

Conventional- dependent on if it a Fannie Mae loan, or a Freddie Mac loan, different restrictions apply.  Guidelines can be much more restrictive.

If an FHA loan meets your needs, in general, it is a better mortgage to get.  If it doesn't, I can still get you conventionally financed, but realize it will take more work.

Here is Tim O'Leary's Contact Information:

Tim O'Leary
Private Mortgage Banker
Wells Fargo Home Mortgage of Hawaii, LLC
MAC M2204-092
1357 Kapiolani Blvd Suite 910
Honolulu, HI 96814
808.952.5054 Tel
808.227.1199 Cell
866.967.9082 Fax
Tim.O'Leary@wellsfargo.com
http://www.homeloans.com/tim-oleary1

And, of course, if your looking for current Honolulu Condos for Sale, please get in touch with us any time.