FHA Loans

Your Government Hard at Work for You

The Federal Housing Administration (FHA) has been helping Borrower(s) qualify for a home mortgage for close to eighty years now. They insure private loans which significantly reduces the risk to the Lenders providing mortgages.

What does all of that mean to you?

It means that with the help of FHA, Lenders can be a little more lenient on qualifying components. This means that Borrower(s) that traditionally didn’t meet qualifying requirements, now can through the help of FHA. Here are some of the advantages of an FHA Loans:

• Low Down Payment:

  FHA Loans allow for a very small down payment. Traditionally, a purchase mortgage requires 10%-20% as a down payment. With FHA that number has been reduced to as low as 3.5%. This allows Borrower(s) with very little in savings to qualify for a home they may otherwise not qualify for.

• Gift Money:

  Speaking of the down payment, did you know that you can receive a gift from a family member to cover the down payment? With FHA this is a possibility.

• Lenient Guidelines:

  FHA is dedicated to putting Borrower(s) into homes. They do this by making the loans a little easier to qualify for, and this helps all kinds of Borrower(s) with special situations, or a few bumps and bruises qualify for a home mortgage.

FHA Loans are available for both purchase and refinances. They are also available as Fixed Rate Mortgages and as Adjustable Rate Mortgages (ARM). You don’t have to currently have an FHA loan to refinance using an FHA loan. However, it’s important to note that FHA loans do require that you pay both Up Front Mortgage Insurance Premium (UFMIP) in the neighborhood of 1%, and a Monthly Mortgage Insurance Premium (MIP). It’s this insurance that allows for the more lenient qualifying guidelines, and the minimal down payment. (Generally, the insurance is very inexpensive because in the end FHA is trying to put you in the home. They don’t want to be the obstacle keeping you out).

To get an exact quote on what the UFMIP and MIP would be on your potential loan contact us:

The Simple Truth

The FHA Loan is responsible for putting a WHOLE LOT of Borrowers into homes that would have otherwise struggled to qualify for a mortgage. It’s a great First Time Buyer Program due to its low down payment requirements, gift options, and lenient qualifying requirements. If you’ve had some bumps and bruises on your credit, or find yourself struggling to find the 20% down payment to qualify for a conventional loan, than the FHA Loan may be a great option for you to explore.