FHA Loans Information
An FHA loan provides low-cost insured home mortgage options that can suit a variety of circumstances. Whether you're buying a home or want or refinance your mortgage, FHA Loans might be right for you. If you're unsure about your credit rating, or have concerns about a down payment, FHA Loans can give you piece of mind with super low closing costs and flexible payment options.
What is the Federal Housing Administration (FHA)?
The Federal Housing Administration, known as "FHA", provides mortgage insurance on house loans made by FHA lenders throughout the United States. The FHA insures mortgages on single family and multifamily homes and is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934.
How is the FHA funded?
The FHA is presently the only government agency that operates entirely from its self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely.
Why choose 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.