New York FHA Loan

There are thousands of people who dream of living in New York and walking past the central park to office everyday. New York has a different heartbeat from any other cosmopolitan city in the world. Some people even say that New York doesn't follow anyone but every other metropolitan likes to be like New York.

In such a great city, it can be often difficult to find real estate homes. But if you do find a great real estate property then the best way to finance it will be through a New York FHA Mortgage. A New York FHA Loan is a loan insured by the Federal Housing Authority, which is part of the U.S. Department of Housing and Urban Development (HUD).

According to the census data of the year 2000, there were 7,679,307 housing units in New York, which is a 6.3.5% increase from 7,226,891 in 1990. Out of these housing units, 6,571,083 were situated in urban areas or clusters while 1,108,224 were situated in the rural area. The homeownership rate in New York stands at 53.5% today while the vacancy rate, which includes seasonal lodging stands at about 8.1%. The average household size in New York is 2.61 people and most of the houses, apartments and condos in New York were built after 1954.

Since 1934, FHA loans have been used to lower down-payment requirements and make it easier for an individual to qualify in comparison to the conventional loans. However, in the recent years Fannie Mae and Freddie Mac have also introduced low down-payment programs like the Community Home Buyer program. So how is a FHA loan in New York different from any other loan? Let's take a look at the various program and guidelines that constitute a FHA mortgage in New York:

The FHA loan limits vary geographically

Apart from the 30-year fixed and adjustable loans, the New York FHA Mortgage has some unique programs to offer like the 203K loan and the Title 1 loan, the latter being for home improvement and requires no equity.

If you go for a fixed-rate loan, then your monthly payment of principal and interest will never change through the life of the loan. There is a possibility that your property taxes may go up and so can your homeowner's insurance premium but a fixed-rate loan your payment will always be stable.

The fixed-rate loans are offered by a New York Mortgage company and are available in different shapes and sizes, for example 40-year, 30-year, 20-year, 15-year, and 10-year programs. Some fixed-rate mortgages are also known as biweekly mortgages and they basically shorten the life of the loan. You can pay every two weeks with a total of 26 payments in a year. This will add up to an extra monthly payment each year and take off 7 years off the total life of your mortgage.

In the early amortization period in a fixed-rate loan, which can be issued by a New York mortgage lender, a large percentage of the monthly payment will go towards interest while only a small part will go towards the principal. This will gradually reverse itself while the loan ages.

You can also choose a fixed-rate loan if you are looking to lock in a low rate. If you already have an Adjustable Rate Mortgage (ARM) then refinancing using a fixed-rate loan can provide you with monthly payment stability.

A mortgage lender in New York will offer you Adjustable Rate Mortgages in different varieties. These Adjustable Rate Mortgages or ARM's can determine the amount you need to pay based on an outside index.

Most of these FHA loan programs have a cap, which will protect you from the risk of your monthly payment going up too high at a certain period. The cap can be on the interest rate and decide how much interest rate can actually go up during a certain period. The cap can put the interest rate at 2% each year. Then there can be a payment cap, which can directly cap your monthly payment. In addition to all this there is a lifetime cap, which makes sure that your interest rate will never exceed the cap amount at any given point in time.