There are a lot of moving parts in the mortgage world. The fact is that two institutions that play a lot in this process are the government and banking institutions. Each of these plays their own role in the process, especially the lenders at a banking institution. Understanding what they do can be very helpful you to know when you are in this process so that you can make sure that you get all of the help that you need. This article will help you understand the roles that these institutions can play during this lengthy process.

First of all, both banks and government can have a part in the actual mortgage lending process. There are several programs that the government is associated with during the lending process. For instance an FHA loan is a loan that is offered by a lender but they get guaranteed money from the government, which allows them to loosen up some of the requirements such as the minimum 20% down payment. They work with lenders to ensure that anyone who wants to purchase a home has the option to do so as long as they can afford to.

There are many other programs that the government has that can help homeowners. HARP (Home Affordable Refinance Program) is something that gives homeowners the ability to refinance their first mortgage even if they owe more than 100% of the value of the home. There are also mortgage relief programs that help to modify your loan for terms that are more affordable. Another great program is the Home Affordable Foreclosure Alternatives Program (HAFA), which can help borrowers to purchase a short sale home or a Deed-in-Lieu of Foreclosure.

Ultimately even with these programs, a bank is the one who is lending the money. They have specific standards that they are looking for before they will even consider a loan. Through a lot of these governmental agencies and programs, they are able to be a bit more lenient on these often strict standards but there are still requirements that borrowers must meet if they are going to purchase a home. For instance, often times with an FHA loan you are able to put as little as about 3.5% down for a home rather than the standard 20%.With a VA loan, you may not even need a down payment in order to purchase a home.

These two institutions work together to help ensure that anyone who wants a home can have a chance to accomplish these dreams. With some research and talking to people you know, you can find the right solutions that will meet your individual needs. Talk to any friends or family members that have just purchased a home to see what information they can give you. It can also be very helpful to discuss your options with a financial expert, especially a mortgage broker, as they will know the best options that are available to you. You can achieve your dreams of homeownership.

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