Federal Housing Administration (FHA) Loans
FHA loans offer many benefits and a level of security that you won't find in other loans because they are insured by HUD (U.S. Department of Housing and Urban Development). Since its inception, the group has insured more than 34 million loans which makes the FHA the world's largest insurer of mortgages.
FHA loans have more lenient requirements including:
These minimal requirements makes this loan programs very appealing to first time home buyers who may be worried that they do not qualify for a loan. Even if you do not have a lot of savings to put down on a house, or your credit score is a little less than perfect, and FHA may be the vehicle to home ownership.
Although FHA requirements are more lenient than qualifying for a conventional loan, there are some drawbacks to an FHA loan. An upfront mortgage insurance premium (UFMIP) is an additional insurance policy that add 1.75% to the size of your loan. This can either be paid upfront at the closing or can be rolled into your monthly payment. This additional insurance policy could add thousands of dollars to your overall loan amount! But the good news is that FHA has recently allowed the UFMIP to be dropped if 20% of equity in the house is established, you can also be refunded your UFMIP if you refinances within 36 months.
If you have recently become a homeowner through an FHA loan, you may be able to drop your upfront mortgage insurance premium, don't hesitate to contact us to see if you are eligible.
If you are interested in an FHA loan, have a specialist help you calculate the TRUE monthly payments for an FHA loan in comparison to a conventional loan. Contact us today to understand your options, it could save you thousands of dollars!
FHA loans have more lenient requirements including:
- A low down payment- 3.5%; or which 3% can be gifted by a relative
- Low closing costs, up to 6% seller concessions. The seller, builders and/or lenders can alsopick up some of the closing costs
- Low qualifying credit scores we do FHA loans down to 500!
These minimal requirements makes this loan programs very appealing to first time home buyers who may be worried that they do not qualify for a loan. Even if you do not have a lot of savings to put down on a house, or your credit score is a little less than perfect, and FHA may be the vehicle to home ownership.
Although FHA requirements are more lenient than qualifying for a conventional loan, there are some drawbacks to an FHA loan. An upfront mortgage insurance premium (UFMIP) is an additional insurance policy that add 1.75% to the size of your loan. This can either be paid upfront at the closing or can be rolled into your monthly payment. This additional insurance policy could add thousands of dollars to your overall loan amount! But the good news is that FHA has recently allowed the UFMIP to be dropped if 20% of equity in the house is established, you can also be refunded your UFMIP if you refinances within 36 months.
If you have recently become a homeowner through an FHA loan, you may be able to drop your upfront mortgage insurance premium, don't hesitate to contact us to see if you are eligible.
If you are interested in an FHA loan, have a specialist help you calculate the TRUE monthly payments for an FHA loan in comparison to a conventional loan. Contact us today to understand your options, it could save you thousands of dollars!
