You can depend on Neal Zuck to recommend highly reputable lenders to help you understand how a FHA mortgage loan works with regards to home finance. In all actuality the Federal Housing Administration (FHA) doesn’t loan any money, they insure it. This means that you’re considered to be a less risky borrower than someone who might not have the backing of the federal government. Neal’s role is to assist you in connecting with a lender to make sure that you qualify for an FHA mortgage and structure your loan to reflect it.
FHA Loan Benefits
FHA insured mortgages are some of the best kinds of mortgages available. This is because they can help more people into the home buying market. Check out the list below to understand some of the most basic benefits of an FHA mortgage.
Easier to Qualify for – because they’re backed by the federal government lenders are more likely to give you the kind of loan that you need.
Low Down Payment – FHA insured mortgages only require a 3% down-payment which makes it easier for people to own homes. Additionally the 3% can come in the form of gifts, unlike many other loan programs.
Lower Credit Borrowers Qualify – because FHA insured loans are backed by the government those with a poor credit history have an easier time getting this kind of loan.
Better Interest Rates – with the backing of the government these loans typically have a better interest rate than most traditional mortgage loans.
Better Home Stability – the FHA has programs designed to help homeowners keep their homes during hard times. The will work with you to help your home from falling into foreclosure. Always try to work out problems with your lender before the situation becomes dire.
The following is a partial list of programs offered for Homebuyers with a brief description of the key elements.
- CONVENTIONAL: Programs available for the borrower who needs up to 97% financing. Available in loans for 5 thru 30 year payment programs, Fixed or Adjustable rate interest rates.
- GOVERNMENT PROGRAMS (FHA/VA): Numerous loans are available under these programs. 100% financing or minimal down payment is available. Loan amount limits do apply.
- RATE OR TERM RE-FINANCING: For the customer wanting to obtain a lower interest rate or different length of loan. Loans are based on a maximum of 95% of appraised value.
- CONSTRUCTION/PERM: Offers a one time closing for those who are building their new home. Your interest rate is locked in before construction begins. During construction you will be paying interest only payments on the funds that have been dispursed to your builder. At the end of your construction period, normally 6 – 12 months, your loan converts to a permanent mortgage.
- INTEREST ONLY LOANS: For the homebuyer who wants more flexibility in their payment. A borrower has the option to pay the minimum interest only payment or any amount greater. The additional payment is applied toward the balance on the loan.
- SECOND HOME: A program for the homebuyer wishing to purchase a vacation home. This purchase can be financed up to 80% depending on the loan amount.
- INVESTOR/RENTAL PROPERTY: Buyers who are looking to generate rental income by purchasing these types of properties. Multiple property ownership is allowed under certain programs. Financing up to 80% is available.
- BALLOON/ARM’S: These programs are intended for the homebuyer who feels they will only occupy the property for a certain period of time.
- HOME EQUITY LOANS AND LINES OF CREDIT: These programs are designed to allow a homeowner to draw from the equity in their home. These loans can be used for almost any purpose: finance higher education, pay off higher interest credit cards, or even a dream vacation.
FHA Loan Center
It’s easy to understand why many people looking for a new home are turning to FHA insured loan programs. Because FHA Loans are insured by the Federal Housing Administration homebuyers have an easier time qualifying for a mortgage. Those who typically benefit most by an FHA loan are first-time home buyers and those who have less than perfect credit.
The links to the right are articles aimed at helping you better understand FHA loans. With this information you can make a more informed decision on whether these government insured loans are right for you and your family.
New Changes in FHA Loans
In response to the growing housing situation in the United States the loan limits for FHA Loans has been raised. Depending on where you live you might find it even easier to qualify for a FHA Loan.
Here’s a list of common questions related to FHA mortgages.
What is the FHA?
- FHA stands for the Federal Housing Administration. It was created in 1934 to help Americans get into homes.
What makes a FHA insured mortgage beneficial?
- A FHA insured mortgage is easy to qualify for, can be obtained with less than perfect credit, costs less and requires a smaller down-payment.
Where can I find FHA forms and other literature?
- A great source for FHA forms and information is http://www.hud.gov/library/index.cfm.
What is the FHA Loan limit in my area?
- The loan limit across the country is different. It’s best to check this out using an FHA loan limit calculator.
Can I pay an FHA loan off early?
- Yes, however be sure to check the pre-payment section of your contract before signing.
Is there a FHA program to help me refinance my loan?
- Yes, there are numerous plans that you can ask Neal Zuck Real Estate to recommend.
- Can I refinance my adjustable rate mortgage to a fixed rate FHA loan?
- Yes, talk with Neal Zuck Real Estate to see if refinancing makes sense for you.
Are FHA Loans assumable?
- Absolutely, you can assume an existing FHA loan or allow a buyer to assume yours.
Will I have to pay mortgage insurance with an FHA loan?
- Yes, in fact FHA mortgages often require you to carry mortgage insurance for longer than most conventional loans.