How to apply for an FHA Loan

Apply for an FHA Loan

Instruction to apply for an FHA Loan
When deciding on an FHA Loan Program, some of the important steps that need to be completed are:

Contact an FHA Loan Lender

Compare interest rates and closing costs

Lean about current FHA Loan Requirements and FHA Loan Limits for your area

Complete an FHA Loan Application

Provide your FHA Loan Lender with all requested documentation

Close the FHA Loan Transaction

When purchasing a home with an FHA Loan, it is important to remenber that a 3.5% down payment will be required at closing. This down payment can be a gift from a family member or charitable organization.

Why should I apply for an FHA Loan?
There are lots of good reasons to apply for an FHA Loan, especially if one or more of the following apply to you:

You don't have perfect credit

You don't have a lot of money to spend on a down payment

You're worried about your adjustable rate monthly payments increasing

You're a first-time home buyer

You want a low interest fixed-rate loan

If any of these things describe you, then an FHA Loan may be your best mortgage option. Why? FHA-insured loans offer many benefits and protections that you won't find in other loans including:

FHA Loans are Credit Flexible
FHA Loan Credit guidelines are not completely score driven. They are written in a way that provides the borrower the benefit of the doubt that there had been circumstances beyond their control in their past. Provided the borrower has recovered from those circumstances in a reasonable manner, they're generally going to be credit-eligible for an FHA loan. A 640 FICO credit score is required to obtain an FHA Loan Approval.

FHA Loans Carry Great Rates, Low Monthly Mortgage Insurance
Another advantage of FHA loans, as compared to a conventional loans, is great interest rates and lower monthly mortgage insurance (MI). Standard FHA loan interest rates are usually better than a conforming 30-Year Fixed loan.

FHA Loans Have Smaller Down Payments
FHA Loan Qualifications only require a 3.5% down payment and the money can be a gift from a family member, employer or charitable organization, which other programs don't allow.

FHA Loans Offer More Protection to 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, the FHA loans have many options to help you keep you in your home and avoid foreclosure.

What Kinds of FHA Loans are Available Today?

Purchase FHA Loans - FHA Loans can be used to purchase a home in all 50 states. Purchase FHA Loans are available with very low fixed FHA Loan Interest Rates. The Maximum FHA Loan Amount varies from area to area. The lowest maximum FHA Loan Amount for any area is $271,050.

Refinance FHA Loans - FHA Loans can be used to refinance home loans for various purposes including interest rate reduction, payment reduction, debt consolidation, cash out, and home improvement. FHA Loan Refinance can be used to access up to 97.75% of your homes current appraised value.

Fixed rate loans - Most FHA Loan Terms offered are in fixed-rate mortgages. In a fixed rate mortgage, your interest rate stays the same during the whole loan period, normally 30 years. The advantage of a fixed-rate mortgage is that you always know exactly how much your monthly payment will be, and you can plan for it.

Adjustable rate loans - Most first-time home buyers are a little stretched financially, so they want payments as low as possible at the beginning. With FHA's adjustable rate mortgage (ARM), the initial interest rate and monthly payments are low, but these may change during the life of the loan. FHA uses the 1-Year Constant Maturity Treasury Index (1 Yr CMT the most widely used index, to calculate the changes in interest rates. An index is a measure of interest rate changes that determine how much the interest rate on an ARM will change over time.

As you can see, there are many options that are available when considering an FHA Loan Online.

Why choose an FHA Loan?

FHA House Loans require a low 3.5% down payment.
Non-occupant, co-borrower are permitted by FHA Loan Requirements.
FHA Loan Underwriting guidelines use expanded qualifying ratios.
There are no pre-payment penalty requirement for an FHA Housing Loan.
FHA Insured Loans carry low fixed interest rates.
FHA Loan Guidelines have lower MI premiums.
An FHA Loan Program is eligible for non-credit qualifying, streamline refinance.
A HUD FHA Loan is available all areas of the country, provided a market exists for the property and the home meets HUD's minimum property standards and the price is below the Maximum FHA Loan amount for that area.
You can get an FHA Loan to purchase or refinance a new or existing one to four family home in urban and rural areas.
FHA Fixed-Rate Loans are offered at terms of 15 or 30 years.

FHA Loan FAQ'S

What is an FHA Loan?
An FHA loan provides low-cost insured home mortgage loans that suit a variety of purchasing and refinancing options.

What are FHA Loan Limits?
Today's maximum FHA Loan Limits are determined by the area where the subject property is located.

How can I qualify for an FHA Loan?
You must obtain correct FHA Loans Information to determine if you could qualify for today's FHA Loan Insurance guidelines. Certain FHA Loan Credit Score and FHA Loan Income guidelines must be met.

What are current FHA Loan Fees?
The FHA has a list of allowed fees that can be charged to the borrower on FHA Loans. These fees are referred to as allowable closing costs, and can vary from lender to lender. The FHA Loan MIP (Mortgage Insurance Premium) amounts to 1.75% of the loan amount and in usually financed in the mortgage.

Do FHA Loans have Mortgage Insurance?
FHA Loans have Monthly Mortgage Insurance on loans with a term of greater than 15 years and a loan-to-value ratio of 90% or greater (meaning you are borrowing more than 90% of the value of the home). FHA Mortgage Insurance (MI) is not considered FHA Loan PMI, because it is not provided by a private mortgage insurance company like on Conventional Loans. When comparing the monthly mortgage insurance rates on FHA Loans vs Conventional Loans PMI, the FHA MI Rates are usually better.