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 FHA Mortgage Loans
What are FHA Mortgages?
FHA stands for Federal Housing Authority. A Federal Housing Authority loan provides low-cost insured home mortgage loans that suit a variety of purchasing options. Whether you're buying a home or want or refinance your mortgage, an FHA mortgage loan might be right for you. If you're unsure about your credit rating, or have concerns about a down payment, ENG Lending's FHA mortgage loans can give you piece of mind with super low closing costs and flexible payment options.
What are the advantages of FHA Mortgage versus Conventional Loans?
FHA mortgage loans offer many benefits and protections that you won't find in other loans including:
 FHA Mortgages are Credit Flexible
FHA mortgage loan requirements are not totally credit score driven, although it is helpful to have at least a 580 FICO score to obtain a faster approval. FHA mortgage guidelines are written in a way that provides the borrower the benefit of the doubt that there had been, at some point in their past, circumstances beyond their control, and as long as the borrower has recovered from those circumstances in a reasonable manner, they're generally going to be credit-eligible for an FHA mortgage.
FHA Mortgages have Great Interest Rates and Low Monthly Mortgage Insurance
A distinct advantage of an FHA mortgage, as compared to a conforming loan, is great interest rates and lower monthly mortgage insurance (MI). Depending on the program, the daily FHA mortgage rates are usually better than a conforming 30-Year Fixed loan.
FHA Mortgages Require a Smaller Down Payment
FHA Mortgages have a low 3% down payment and the money can come from a family member, employer or charitable organization as a gift. Other loan programs don't allow this.
FHA Offers 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 has many options to help you keep you in your home and avoid foreclosure.
What factors determine if I am eligible for an FHA Loan?
To be eligible for an FHA Mortgage Loan, your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income (31% ratio). Your credit background will be fairly considered. At least a 580 FICO credit score is very helpful to obtain an FHA approval. You must also have enough income to pay your housing costs plus all additional monthly debt (43% ratio). These ratios can be exceeded somewhat with compensating factors.
See more on FHA Mortgage Requirements.
What is the maximum amount that I can borrow?
The maximum amount for an FHA home loan is determined by:
Maximum Loan Amount: The maximum loan amount allowed for an FHA Mortgage varies from county to county. The highest maximum FHA Mortgage right now is $729,750. The lowest maximum FHA Mortgage amount available in any county is $271,050. To see what the limit is in the county in which you're interested, visit the following site https://entp.hud.gov/idapp/html/hicostlook.cfm. This site lists U.S. territories as well as states.
Maximum financing: Depending on the state where the property is located, the maximum FHA Mortgage amount will be either 98.75% or 97.75% of the appraised value of the home or its selling price, whichever is lower.
How much money will I need for the down payment and closing costs?
FHA Mortgage Loans require the home buyer to invest at least 3% of the sales price in cash for the down payment and closing costs. If the sales price is $100,000 for example, the home buyer must invest at least $3,000. However, the home buyer can use gifts from family, funds from local, state or government agencies, or other sources for the down payment.
What property types are allowed for FHA Mortgages?
While FHA Mortgage Guidelines do require that the property be Owner Occupied (OO), they do allow you to purchase condos, planned unit developments, manufactured homes, and 1-4 family residences, in which the borrower intends to occupy one part of the multi-unit residence.
Can I get an FHA Mortgage after bankruptcy?
Criteria for FHA loan approvals state that if you have been discharged from a Chapter 7 bankruptcy for two years or more, you are eligible to apply for an FHA mortgage. If you are in a Chapter 13 bankruptcy and have made all court approved payments on time and as agreed for at least one year, you are also eligible to make an FHA loan application.
More information on FHA Mortgages
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 Why an choose FHA Mortgage?
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FHA Mortgages require a Low 3% down payment.
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Non-occupant, co-borrower are permitted for qualifying for an FHA Mortgage.
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FHA Mortgage Loans use Expanded qualifying ratios.
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There are no prepayment penalties for an FHA Mortgage.
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An FHA Mortgage is fully assumable.
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FHA Mortgages have lower MI premiums.
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An FHA Home Loan is eligible for non-credit qualifying, streamline refinance. -
An FHA Mortgage is available all areas of the country, provided a market exists for the property and the home meets HUD's minimum property standards.
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An FHA Home Loan may be used to purchase or refinance a new or existing one to four family home in urban and rural areas, including manufactured homes on permanent foundations. -
FHA Mortgages are offered at terms of 15 or 30 years.
What types of FHA Mortgages are available?
Fixed Rate Mortgage
Most FHA mortgages are fixed-rate mortgages. In a fixed rate mortgage, your interest rate stays the same for the entire loan period. With a fixed rate FHA Mortgage, you always know exactly how much your monthly payment will be. The Daily FHA Mortgage Rate is usually better a conforming 30 year fixed rate with no points and
daily FHA rate with points is even better. Contact us for today's free FHA mortgage rates.
Adjustable Rate Mortgage
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.
The maximum amount that the interest rate that an ARM FHA Mortgage may increase or decrease in any one year is 1 or 2 percentage points, depending upon the type of ARM that is chosen. Over the life of the loan, the maximum interest rate change is 5 or 6 percentage points over the initial interest rate.
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