Education is key when purchasing a home.
Iowans thinking about buying a home have many resources that can guide them to the right Iowa mortgage loans. There is also help for Iowans who are having trouble paying their mortgage. Those just getting started might want to research general mortgage information. The Federal Reserve Board publishes a beginner's guide to home mortgages, as well as a guide to adjustable rate mortgages or ARMS. The Home Loan Learning Center, a project of the Mortgage Bankers Association, can help consumers understand types of mortgages and the steps necessary to apply for a mortgage loan. Armed with a little knowledge, Iowans will be in a better position to evaluate options in their home state.
Those looking for a qualified mortgage broker can start by checking with the Iowa Association of Mortgage Brokers, which is affiliated with the National Association of Mortgage Brokers. The Iowa Mortgage Association also has a lot of information for homeowners, including links to resources like financial calculators, government agencies and prominent lending institutions. For those entirely new to the process, the Iowa State University Extension has an online class that guides people through shopping for a home and applying for a mortgage. In addition, the Iowa Home Ownership Education Project has information for homebuyers and those facing foreclosure, in both English and Spanish.
Home buyers in Iowa should be sure to check out federal assistance programs, like the mortgage insurance program run by the Federal Housing Administration that helps those purchasing or refinancing a home to obtain money from a lending institution. Buyers may also be eligible for loans from the U.S. Department of Veterans Affairs or the Rural Development and Housing program from the U.S. Department of Agriculture.
According to the Iowa Finance Authority (IFA),the state offers its own slate of assistance programs for low- to middle-income residents. Its Military Service Member Homeownership Assistance is for service people who wish to establish a primary residence in Iowa, and have served at least 90 days active military duty. The REOHome Program gives buyers up to $10,000 to cover down payments and closing costs on homes that were repossessed by banks due to foreclosure.
First-time home buyers can take advantage of the IFA's FirstHome program, which helps people to obtain a low, fixed-rate mortgage. The IFA's FirstHome Plus program will even let buyers take out a loan to cover closing and down payment costs. In 2008 and 2009, the federal government enacted the First-Time Homebuyer Credit.Those who purchased homes in 2008 are eligible to receive a $7,500 credit, which may not be used with IFA's FirstHome programs. Homeowners who purchased a house in 2009 are eligible to receive an $8,000 credit and take advantage of the FirstHome program.
Homeowners who are having trouble paying their mortgage should contact their bank early to find out about mortgage modification programs. The U.S. Department of Housing and Urban Development publishes a guide to avoiding foreclosure that includes links to qualified foreclosure avoidance counselors, as well as information on refinancing options and redemption. In 2009, President Barack Obama approved the Homeowner Affordability and Stability Plan designed to help homeowners restructure their mortgages and avoid foreclosure. Those looking for more information can visit the Federal Insurance Deposit Corporation website or read this article published by U.S. News & World Report.
In response to the foreclosure crisis, Iowa set up a foreclosure hotline that connects callers toll-free to the Iowa Mediation Service (IMS). The IMS runs a voluntary program to help mortgage lenders and homeowners negotiate a deal that works for both parties. At times, the IMS may also refer clients to an outside counseling agency. The service is for people who have fallen behind on their mortgage payments, as well as those who think they will likely fall behind. The service may be particularly helpful to subprime borrowers who took out ARMs with rates that ballooned after two years. In these cases, the IMS may be able to help restructure.
Before calling the foreclosure hotline, those with questions can visit Iowa Mortgage Help (IMH), a web site published by the IFA. IMH recommends that homeowners have their paystubs and other income records on hand when they talk to a mortgage counselor, in addition to their mortgage statement. Homeowners may also need to fill out the IMH's counseling agreement, which authorizes the agency to contact their mortgage lender or refer their case to another organization.