FHA loan programs are flexible. FHA loan programs are secure. FHA loan programs reflect Government's commitment to expanding homeownership through the FHA loan with reduced down payment requirements and relaxed underwriting standards compared to a conventional loan.

FHA loan programs recognize high cost areas and have increased the maximum FHA loan amounts. The FHA loan limits are:

Find the FHA loan limit in your county.

FHA loan programs are an outstanding choice for first time homebuyers because an FHA loan requires only 3% cash (which may be a gift) and is more forgiving of past credit issues. FHA loan programs look at the last two years of your credit history. If there are credit problems, an FHA loan can overcome them with explanations and supporting documents. Never rule yourself out of qualifying for an FHA loan because of credit.  I have information on FHA Loan credit requirements available and would happy to review this information with you.

Purchasing a home ..

There are some credit issues that must allow time before you qualify for FHA. 

• Two years from the date of discharge for a bankruptcy
• Three years from the date of foreclosure
• They require any outstanding collection accounts be paid before closing. If you have had credit difficulties, FHA loan compensating factors can often get you approved.

ADVANTAGES

• They are assumable
• With their no cost streamlined refinancing you can lower your payment at NO COST to you. Usually, closings can occur within 2-3 weeks.
• The ARM has the best features on the market with a 1% annual interest rate cap and a 5% lifetime cap.
• Higher qualifying ratios of 29% for housing and 41% for total indebtedness
• More flexible underwriting standards
• Gift funds for down payment and closing costs are allowed
• Up-front Mortgage Insurance Premium can be financed
• Less cash out of pocket required
• The lowest down payment (as low as 3%, never more than 5%) requirement of any non-subsidized financing program
• Seller allowed to pay prepaid expenses
• Seller can contribute up to 6% of purchase price toward closing cost and discount points 

Streamline Refinance

They have permitted streamline refinances on insured mortgages since the early 1980's. The basic requirements of a streamline refinance are:

• The mortgage to be refinanced must be insured.
• The mortgage to be refinanced should be current
• The refinance must lower the borrower's monthly payments.
• No cash may be taken out on mortgages refinanced using the streamline process.
  
  Click here to go to a calculator to help you calculate your FHA Loan qualification ratios.

There is far too much information regarding FHA loans to cover here, but hopefully this will provide you with the basics.  For more information or to get pre-qualified, email me or call me at 818-378-8669, or go to: http://www.zillow.com/fha-loan/

Do You Have to Buy Mortgage Insurance on an FHA Loan?

Yes - as you will with most all of them. There is an up front mortgage insurance premium equal to 1.5% of the loan amount that is paid at settlement. In most cases, this mortgage insurance premium is included in your loan amount, so you are really paying it over the life of the loan. In addition, 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), you will pay an annual mortgage insurance premium of 0.5% of the loan amount in monthly installments.

Example:
Up Front Mortgage Insurance Premium
Mortgage amount: $100,000 X 1.5% = $1,500 @ 6.5% for 30 years = $ 9.48 per month
Annual Mortgage Insurance Premium
Mortgage amount: $100,000 X 0.5% = $ 500/12 months = $41.67 per month
Total Mortgage Insurance Premium $51.15 per month

Most loans require mortgage insurance when your down payment is less than 20% of the sales price. On conventional and subprime loans, mortgage insurance is provided by private companies. Whether private mortgage insurance is less than, equal to, or more than FHA loan insurance will depend upon the loan program and your qualifications.

Compare the cost of FHA over the life of your loan and how much it costs monthly to subprime and conventional types of loans. With the protection you get with FHA - it's a very good deal.

Have Questions?

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