I’m sure you’ve heard the term many times while shopping around for your mortgage, but what exactly is an FHA home loan? An FHA home loan is a mortgage insured by the Federal Housing Administration and are very popular. Why? Read on to learn more!
Why Do People Get FHA Loans?
FHA home loans are a popular choice among first time homebuyers, as well as those looking to refinance. Some of the main reasons are:
- the FHA qualifications needed to get a home loan tend to be easier than other mortgage programs
- there are home improvement mortgage options
- for those that already have a FHA home loan, the refinance process typically doesn’t require as much documentation, making it that much faster
Do You Qualify?
If you’re a bit worried about your income and credit history, don’t give up quite yet! Guaranteed and insured by the U.S government, FHA home loans feature more flexible down payment options, income, and credit score requirements. You may be able to buy your dream home by putting just 3.5% down, YES, 3.5% down!
And even better news, you may be able to use a down payment assistance program, depending on your location, of course. Programs will vary by state and county. You can also use “gifts” to help you reach your down payment goal, so if you have that charitable family member that would like to help you out, you’re all set.
What Is An FHA Streamline?
Are you already an FHA homeowner? Have you been hearing all of the hype about rates being at record lows? If you’re contemplating a refinance to save some dollars every month, an FHA streamline may be an option – here’s why! When you refinance from one FHA loan to another, the documentation you need to give is limited, as in way less paperwork needed to complete the refinance process. In the end this means one thing… a faster closing!
What Is The Home Improvement Loan?
Have you found your dream home but it’s in need of a few repairs? Finding that extra cash for home repairs can be very difficult, especially when you’re already using a lot of your savings for a down payment. Well, the Federal Housing Administration has got you covered! The FHA has a special loan product for borrowers who need the extra cash for home repairs. This type of loan is called a 203(k).
The 203(k) loan works by adding the dollars needed to make the home upgrades on top of the loan amount to buy or refinance the home.
What’s The Deal with Mortgage Insurance?
While FHA home loans are pretty awesome, you also need to understand that there is a one-time upfront mortgage insurance fee, as well as a monthly mortgage insurance payment. This is an insurance policy taken out by the homeowner that protects the lender against loss should the homeowner default on their mortgage payments. Learn more about mortgage insurance in our crash course.
We’re an FHA approved lender, so if you’re ready to buy your dream home, give our team a call at (877) 706-5856 or get a quote online.