Missouri: Mortgage and Loan

The American Association of Residential Mortgage Regulators (AARMR), the Conference of State Bank Supervisors (CSBS), as well as government agencies in the state of Missouri particularly the Division of Finance were very much concerned about the risks that come with non-traditional mortgage and loan programs, mainly high risk Sub Prime programs. An "inter-agency" guidance has been published in the 71st volume of the Federal Register to furnish loan and mortgage providers and home buyers necessary and adequate knowledge about these risks. The federally regulated FHA Loan in Missouri is the most ideal option for home buyers and homeowners alike.

What are non-traditional Missouri mortgage/loan programs?

Since some conventional or traditional home loans are not always easily accessible to most, the FHA, since the Fair-Housing Act, has tried to cater to a wider continuum of consumers through a gamut of more flexible programs. In this approach, consumers with imperfect credit, who have established recent stable credit histories, and high LTV (load-to-value) or DTI (debt-to-income) ratios, have a better opportunity of procuring a home of their own. Most FHA loans in Missouri come with mortgage insurance premiums. Mortgage insurance premiums are preset fees to insure lenders in cases of foreclosures.

Examples of non-conventional programs, where a consumer may postpone or prolong payment of principal fees and interest fees, are more specifically: "interest only" mortgages and adjustable-rate mortgages (ARM)

• Interest-only mortgages - In this kind of program, a consumer does not pay the mortgage principal for a certain duration which may be negotiable. This type of program is not available with the FHA Loan program in Missouri.
• ARMs - ARMs are sometimes utilized as marketing tools by loan companies. This kind of program typically provides for lower payments (usually lower than the index rate) during a span of time and adjust upwards or down based upon the index they're tied to and the margin of profit established at closing. The FHA loan program in Missouri only provides for a FHA one year ARM program.

How do I start my Missouri FHA Loan Process?

Though getting financing from well-known banks is usually the first step the home buyer (more common to first-timers) takes, it may not always be the wisest of decisions. Yes, there is a possibility that a home loan can be acquired, but you may not get the best mortgage loan deal with your bank.

As a home buyer or homeowner, you have a statistically superior chance of getting the best deal on a home loan in the secondary market. The best way to obtain a home in Missouri is to get pre-approved for an FHA loan with us. Getting pre-approval from 1st Continental Mortgage allows you to gauge the type of home you can afford as well as how much money you will need to pay for closing costs and down payment. For the Missouri FHA loan, you will need to be prepared to disclose some necessary documents and information regarding your gross monthly income, credit issues, debts and other monthly outlays in order for us to arrive at a good calculation of the maximum home value you can afford. If you still have not chosen a lender, 1st Continental Mortgage would love to help you with your Missouri mortgage. Our websites several mortgage calculators you can use to arrive at a projection of these amounts.

What is next for my FHA Missouri Mortgage?

Afterwards, 1st Continental Mortgage will provide you with a detailed Good faith estimate. This GFE represents what we estimate your Missouri FHA loan will costs you to close. We encourage you to take ample time to review these closing costs. Closing costs generally include fees to cover the following:

• insurance title
• title examination
• credit reports
• appraisal costs
• abstract of the title
• pertinent documentary costs
• property surveys
• notary costs

If the rates that 1st Continental Mortgage offers you is higher than those found in the paper, keep in mind your credit, potential fees associated with those lower rate and no rate is assured until you have locked. Many lenders and brokers advertise extremely low rates, but don't disclose to borrowers the real cost of the rates until you get your GFE.

Having a broad knowledge of the types of mortgage rates may help you understand Missouri FHA loans more. For instance, there is a huge difference between what a note rate is and what the annual percentage rate is. The former is the interest rate (usually fixed) of the entire loan while the latter is the annual rate inclusive of all charges and prepayment penalties procured during the set lifetime of the loan. Keep in mind, by law, the FHA Loan in Missouri cannot have a prepayment penalty!