FHA FINANCING
What is an FHA loan?
The Federal Housing Administration (FHA) provides low cost, flexible financing options for borrowers who may not have the funds for a large down payment or who have had credit troubles in the past. FHA does not actually lend the money for the mortgage, but rather acts to protect the lender, by insuring the loan if the borrower defaults on the loan.
How can FHA help me buy a home?
FHA insured mortgages offer many benefits and protections that only come with FHA:
- Easier to Qualify: Because FHA insures your mortgage, loan terms are more flexible, making it easier to qualify.
- Less than Perfect Credit: You don't have to have a perfect credit score to get an FHA mortgage. In fact, even if you have had credit problems, such as a bankruptcy or late payments, it's easier for you to qualify for an FHA loan than a conventional loan.
- Low Down Payment: FHA loans require a low 3% down payment which can come from a family member, employer or charitable organization as a gift. Most other loan programs don't allow gift funds for a down payment.
- Lower Costs: FHA loans have competitive interest rates because the Federal government insures the loans. Always compare an FHA loan with other loan types.
- Helps You Keep Your Home: The FHA has been around since 1934 and will continue to be here to protect you. Should you encounter hard times after buying your home, FHA has many options to help you keep you in your home and avoid foreclosure.
An FHA insured mortgage may be used to purchase or refinance a new or existing 1-4 family home, a condominium unit or a manufactured housing unit (provided the manufactured housing unit is on a permanent foundation).
Are FHA loans only for first time homebuyers?
No, anyone who meets the minimum requirements may apply for an FHA loan. While known primarily for its role in helping millions of first time buyers purchase a home, FHA also offers home rehabilitation and refinance options
What are the basic eligibility requirements for FHA financing?
Because FHA financing is designed to be flexible and accommodating, qualification is often easier than with comparable conventional loans. As with conventional loans, borrowers must be able to prove steady income and employment history and well as meet minimum credit requirements. Additionally, the loan amount must be below the limit set by each county. Contact me today for more information on qualifying for an FHA loan.
What is the FHA Rehabilitation Loan?
The FHA rehabilitation loan (203K), allows borrowers to finance repairs and upgrades into their mortgage. Available for new purchases and refinances, a 203K loan gives borrowers the ability to correct any structural deficits in their home as well as add desired upgrades while taking advantage of FHA low interest rates.
What are the advantages of refinancing to a fixed rate FHA mortgage?
There are significant advantages to refinancing to an FHA mortgage with a fixed interest rate, particularly if you currently have a higher cost mortgage or have a mortgage that has an adjustable or a variable interest rate, optional payments or interest only payments that will increase in the near future. Borrowers with adjustable or variable interest rate mortgages or interest only payment mortgages often encounter much higher monthly payments ("payment shock") after having the mortgage for just a few years.
Contact me today to learn how an FHA loan can help you finance the home of your dreams.
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