VHDA Loan = Legit???

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Please excuse my ignorance as I know almost nothing about loan products.

Speaking with a builder’s mortgage lender, they offered a loan product under VHDA. Ever heard or it?

They have a product called Flex Alt 100. Here are the basics:
-No Downpayment Required
-No Mortgage Insurance
-Lower Monthly Payments
-Expanded Qualifying Ratios
-Tax Advantages
-Flexible Pricing Options
-Available to Current Homeowners

Details: http://www.vhda.com/vhda_com/Template_a.asp?VHDA_COM_PAGE_NAME=Flex_Alt

And then have Flex Alt Advantage. Not sure what the differences are:

http://www.vhda.com/vhda_com/Template_a.asp?VHDA_COM_PAGE_NAME=FlexAdvantage

It seems almost too good to be true. It offers pretty low rates (if you qualify), No mortgage insurance and No down payment!

Any advice? Even though we are first time home buyers, we didn’t qualify for the First Time Homebuyer program because our income was barely over the maximum limit.

Thanks!

I am getting ready to buy a home and my mortgage lender went over some fees but I thought they were all rolled into my end cost with a FHA loan. Well now I have paid almost $ 600 in fees that will be credited to me at closing. I have now picked my closing agent what other fees will I incur before closing? I am just trying to stay afloat with bills and also save enough to have proof of 1st month mortgage. I have searched the internet like crazy but there is not much about fees prior to closing with the VHDA/FHA plus loan. Thanks in advance for anyone’s help! Have a great day.

6 Comments
  1. Reply
    philbertpheinstein
    January 19, 2011 at 8:52 pm

    Read the fine print..

  2. Reply
    pattibcacl
    January 19, 2011 at 9:48 pm

    It sounds to good to be true to me becareful It might be a scam check around Good Luck

  3. Reply
    HC
    January 19, 2011 at 10:27 pm

    Compare with your local bank, youll see how bad mortgage brokers rip people off…

  4. Reply
    destiny
    January 19, 2011 at 11:18 pm

    You will have Escrow fees, Title fees, Lender fees, Broker fees if going through a Broker. The lender will also have you pay upfront taxes and insurance. There are tons of fees that brokers and lenders will try to hide from you. Just be careful and if you are buying in California…….Look me up if things don’t work out and I can do the loan for you and you won’t get screwed. I am all about honesty since I was screwed when I bought my first home. Jennifer…All Family Lending…..Hanford, CA

  5. Reply
    Justin
    January 19, 2011 at 11:32 pm

    You are only allowed to roll in the UFPMI which is the funding fee for the up front mortgage insurance on an FHA loan. There will be other costs which vary from state to state. Ask your lender for your good faith estimate, which will break down all costs associated with the mortgage. If you would like a second opinion on what you are being offered, feel free to email me and I can look over the good faith estimate for you. Good luck!

  6. Reply
    Tim D
    January 19, 2011 at 11:58 pm

    Generally the out of pocket expense related to your getting your first house can be between $ 500-1500 even with a zero down program. Often the amount fronted to qualify or pay for initial expenses is repaid to you at closing but it can be a long month or so without your money.

    Things that can cost you money up front.
    Application Fee – Paid to you lender – Generally just extra profit if you loan closes. It helps cover the cost for the work the lender does on all of the files they work on that don’t close. If they don’t close they lender usually wouldn’t get paid but if they got an application fee this will pay them just a little bit on the front side of a loan.

    Credit report fee – Some lenders make you pay to have them pull your credit report. They do have to pay to get access to your credit report but if they really want your business it should be free.

    Appraisal – To qualify for a mortgage the bank needs to know how much the house you are going to buy is worth. So before funding your loan sometimes you will have to pay for an appraisal.

    Home inspections – You have a home inspector come to the house you are intending on buying and they will go through the entire house and look for problems that you may have over looked. They will generally give you a written report on everything they found wrong with the house and a rough idea on what it would cost to fix these things. This can be really helpful in negotiations with the seller. Say your inspector tells you that you need a new roof and it’s going to cost $ 5000. You can go back to the seller and ask them to reduce the price by the amount needed to repair your new house. They may or may not give it to you. Then it’s your descision if you really want the house with these problems or if you want to keep looking. This may cost you a few hundred but can save you thousands if you end up with a house with problems right away after moving in.

    Securing homeowners insurance – Often to start a policy they will want the first and last months payments up front or possibly a quarterly payment. Get a few quotes on your insurance this can vary drastically. Talk to a few friends or neighbors who own homes and find out where they’re insured and how much they pay per the value of their house in the same area as yours. This should give you a good idea of what’s a good price. You will find them really high and really low. The lowest isn’t always the best and the highest isnt either. Look at deductables and content coverages. Remember you’re moving yourself and all of your stuff into this place make sure it’s properly insured. I personally have alot of electronic stuff and needed extra coverage to make sure they will be taken care of.

    Earnest money – This is an amount of money that is given along with an purchase agreement to the seller. Kinda like a down payment. I’ve purchase with out paying this but it’s rare. I usually try to give as little as possible even $ 300 or so. Generally people give about $ 500- 1000 depending on the purchase price. This is credited to you on your closing documents and if your loan funds the entire purchase price you will get your money back.

    Good luck and ask your mortgage person and your real estate agent about this so you aren’t blindsided by fees and expenses.

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