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FHA Home Purchase

FHA Home Purchase

These government-backed home loans have helped finance the American Dream since 1934. Low down payments and attractive qualifying guidelines put homeownership within reach for many who wouldn’t otherwise be able to afford to buy a home with a conventional mortgage.

These home mortgages can be obtained with a down payment as low as 3.5%, and they’re insured by the Federal Housing Administration. Every FHA borrower who uses this program to finance a house will pay mortgage insurance premiums upfront and annually. The best thing you can do for yourself when researching home mortgages is to learn the facts.

Here are just some of the advantages you can experience with an FHA home loan:

  • Down Payment as Low as 3.5%

  • FHA Limits Closing Costs

  • Straightforward Qualifying

  • No Penalty for Early Payoff

  • Competitive Interest Rates

To start your application, call 1-866-663-0826 now.

Why Is Insurance Needed For An FHA Home Mortgage?

Perhaps one of the most unique features of the FHA home mortgage program is the government backing that comes in the form of mortgage insurance. In fact, FHA is the largest mortgage insurer in the world. Here are just some of the benefits and features that afforded by this government backing affords:

  • Secures the loan for approved lenders

  • Loan security allows for favorable terms like lower down payments and capped costs

  • Pays 100% administration costs to run the loan program — it costs American taxpayers nothing

  • Enables borrowers access to free housing resources like foreclosure counseling

Two insurance premiums are typically required on all FHA loans– Upfront Mortgage Insurance Premiums (UFMIP) and Annual Mortgage Insurance Premiums (MIP). The rate for UFMIP is 1.75% of the base loan amount on all loans except certain streamline refinances. This sum can be paid in cash at closing, or it can be included in the loan.

MIP is assessed for all purchase and refinance mortgages. The amount can vary depending on the loan amount, the length of the loan and the loan-to-value (LTV). The maximum amount of MIP is 1.55% of the base loan amount. This is for loans longer than 15 years with balances more than $625,500 and more than 95% LTV. But, most FHA loans are less than $625,500.

For instance, if you put less than 5% down on a 30-year loan of $300,000, your MIP will be 1.35%. On 15-year loans or shorter, your base loan amount is $625,500 or less and your LTV is 90% or less, then your MIP will be reduced significantly to just .45%.

Borrowers pay annual MIP monthly with their principal and interest payments. Recent changes in the FHA MIP schedule have borrowers now paying MIP for at least 11 years or as long as they have the loan.

Use these tables to calculate your annual MIP for loans after April 9, 2012:

Loan Terms > 15 Years

Base Loan Amount

LTV

MIP

≤ $625,500

≤95%

1.30 %

≤ $625,500

>95%

1.35 %

>$625,500

≤95%

1.50 %

>$625,500

>95%

1.55 %

Loan Terms ≤15 Years

Base Loan Amount

LTV

MIP

≤$625,500

>78% – 90%

. 45%

≤$625,500

>90%

. 70%

>$625,500

>78% – 90%

. 70%

>$625,500

>90%

. 95%

Any Amount

≤78%

. 45%

The table below shows how long annual MIP will be amortized based on LTV at the time of origination:

Term

LTV

How Long

≤15 Years

≤78%

11 Years

≤15 Years

78% – 90%

11 Years

>15 Years

≤78%

11 Years

>15 Years

>78%-90%

11 Years

>15 Years

>90%

Loan Term

For FHA STREAMLINE refinancing of existing loans that were endorsed before June 1, 2009, the UFMIP is just .01%. And MIP is .55% for these qualifying streamlines no matter what the base loan amount or term happens to be.

Interest Rates For FHA Loans

One of the most common questions from borrowers has to do with rates. Interest rates for FHA loans are very competitive with the prime mortgage market. There’s really no mystery to mortgage interest rates. They tend to follow the U.S. Treasury Bond market. When bonds go up, so do mortgage interest rates, and vice versa.

When comparing mortgage quotes, borrowers should pay attention to several factors before making a decision:

  • Monthly Payment

  • Costs and Fees

  • Interest Rate

  • Service

Mortgage interest rates are just one part of a loan. Be sure you’re getting a monthly payment you can afford and that your costs and fees are not out of line. Sometimes with a rock bottom interest rate, costs and fees go up. Finally, pick a lender that treats you with respect. A mortgage is a major financial transaction. It should be the lender’s privilege to serve you.

To start your FHA loan application now, fill out our quick 5-minute form. Who’s Eligible For the FHA Mortgage Program?

You can be eligible for the FHA mortgage program if you legally reside and work in the United States. To verify this, be prepared to show a valid social security card and proof of residency. You also need to be “of age” to sign a mortgage, according to your state’s requirements. This is 18 is most states.

Being eligible for the loan program doesn’t mean you qualify for a mortgage. The next step will be showing you are a good credit risk and have the ability to pay. This means the lender is going to examine your income and credit.

To learn if you’re eligible for the FHA mortgage program, call us at 1-888-589-1665.

FHA Loan Qualifying Requirements

This lending program can be excellent for first-time homebuyers who don’t a have a lot of money to put down. FHA loan qualifying requirements allow for lower down payments compared to most conventional loans. And, lenders can still offer attractive interest rates and other favorable features. FHA can’t back a loan unless the property qualifies, and the borrower is a safe credit risk and has enough present and foreseeable income to pay back the loan.

It’s ultimately the approved lender who determines whether a borrower has the ability to pay the loan based on a thorough examination of income and credit. As long as the borrower meets minimum qualifying requirements for both FHA and the lender, he or she can expect the desirable offerings of this home financing program backed by the federal government.

To start your FHA Home Loan application, call us now as 1-888-589-1665 or complete the short pre-application and one of our representatives will be in touch soon.

Fill out this short form and a mortgage expert will get in touch with you.

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