Finance Lesson Five
Learning Objectives Understanding the basics of FHA & VA loans. Applying the terminology to the FHA & VA programs.
FHA (Federal Housing Administration) Department of Housing and Urban Development (HUD) HUD-1 Settlement Form Insures Lenders (they do not make loans)
No Prepayment Penalties Fixed Rate (Budget Loan)
Budget Loan P & I $700 MMI (FHA Ins.) $ 5 Real Estate Taxes $ 50 Insurance $ 80 Total Monthly Payment $835
Mutual Mortgage Insurance
Selling Price of House is: $77,000 FHA Appraisal is: $75,000 3% of $75,000 = $ 2,250 Loan Amount $72,750
Assumable (financially qualified) Selling Price may Exceed Appraised Value Sales Price $80,000 Appraised Price $75,000
VA Loan Guarantees the Lender Does Not Insure the Loan Can be 100% Certificate of Eligibility