Many first-time and experienced homebuyers adore FHA loans. Why? Since 2005, the Federal Housing Administration has ramped up and revised their policies, helping low to middle income families achieve their dream of home ownership with less hassle.

What exactly does an FHA do for you? The FHA insures loans, protecting the lender in the event a borrower defaults. Due to such insurance, lenders are more likely to grant larger mortgage loans with reasonable interest rates and a lot of other benefits.

 
The Pros

 
FHA loans guarantee a low down payment at closing time. Decent credit can get you a down payment as low as 3.5%; conventional loans are usually within the 10% to 20% range.You were young and made some financial mistakes. The FHA is more lenient in regards to credit history mishaps than regular loans. They may also be more forgiving during financial hardships.There are no income limits.There is no penalty for wanting to pay a loan off early—known as the prepayment penalty with other loans.FHA loans could also fund home improvement.One of the most popular benefits is you will not be charged or prohibited from using gifted or borrowed money toward your down payment.

 
The Cons

 
However, FHA loans might not be for you. So, let’s address a few of the cons in obtaining an FHA loan.

There are limits. Depending on the area you live in, you may not be able to receive a high amount on a loan as opposed to a conventional loan.Although, FHA loans do not require private mortgage insurance (PMI), an upfront mortgage insurance payment (UFMIP) will be wanted at the time of settlement. As of April 5, 2010, what used to be only a 1.5 to 1.75 percent UFMIP has been raised to 2.25 percent of the loan amount. Conventional loans do not charge this fee. Persons with above average credit might be able to get better deals with a conventional loan.

Let’s remember. All loans have a good and bad side. You, the potential buyer, must look at your options and decide what’s best for you.

Guest Article: By Stanley Popovich

MANAGING THE STRESSES OF BUYING AND SELLING A HOME

Many people deal with the anxieties of buying or selling a home. This process can be confusing to many people. As a result, here is a list of ways that a person can use to manage the anxiety of purchasing or selling a home.

The first step is to determine your goals in purchasing or selling a home. Determine what you want to accomplish. It will save you a lot of time and money in the long run if you know what you are looking for. Sit down and think about the overall goal of what you are looking for and convey this to your real estate agent. Some people like to write down their goals on a piece of paper so they have something to go back to when they get stressed.

Educate yourself on the steps of purchasing or buying a home. Go to your local bookstore and find some books that will explain the process of buying or selling a home. There are many books available that can inform you of the process and will help reduce the anxiety of the situation. Most importantly, you will be able to make smarter choices that will save you time and money.

Find a reputable real estate agent that can help you accomplish your goals. Ask some of your friends on who they recommend and get in touch with them. Referrals from people you know are a great way in finding a good real estate agent.

Get your finances organized. Make sure you have an idea on what you can afford and also make sure that your credit is good. The financial aspect of buying or selling a home does not have to be scary if you have a sound business plan and a realistic budget. Some people may buy a home that they can't afford and this can cause problems down the road. Determine what you can afford and develop a budget where you will be able to keep up with your bills.

In addition to using the services of a good real estate agent, try to get a friend who is more experienced to help you. Chances are good that you know someone who has purchased or sold a home. You could ask them for their assistance and ask them questions on what to do and what not do. Having a friend who can assist you along the way can really help reduce the anxiety of the process.

Read the fine print on everything before signing and do not assume anything. Ask questions if you are uncertain on some aspects of buying or selling a home. A good real estate agent will not mind if you ask questions, however you should do your part and try to educate yourself on the entire process.

There will be times when everything happens all at once. When this happens, a person should take a deep breath and try to find something to do for a few minutes to get their mind off of the current situation. A person could take a walk, listen to some music, read the newspaper or do an activity that will give them a fresh perspective on things. Once you calm down, you will better able to make the right decisions.

Purchasing or selling a home does not have to be a bigger deal than it has to if you take the proper steps. There is help out there if you get stuck or confused. The most important thing is to do your homework. Determine your goals, educate yourself on the steps to reach your goals, ask questions, and take it one step at a time. If you follow this advice you will be better able to reduce the stresses of purchasing or selling a home.

BIOGRAPHY:
Stan Popovich is the author of "A Layman's Guide to Managing Fear Using Psychology, Christianity and Non Resistant Methods" - an easy to read book that presents a general overview of techniques that are effective in managing persistent fears and anxieties. For additional information go to: http://www.managingfear.com/