FHA loans are mortgage loans that are backed by the Federal Housing Administration (FHA). These loans are designed to help low and moderate-income borrowers to purchase a home with a lower down payment and more flexible credit requirements than traditional loans.
Benefits of an FHA Loan:
Lower Interest Rates: Because they’re backed by the government and carry a lower risk for lenders and investors, FHA loans typically have lower interest rates than conventional loans, particularly for borrowers with credit issues.
Lower Down Payment Requirements: FHA loans only require a down payment of as little as 3.5% of the home’s purchase price. This makes it easier for borrowers to become homeowners without having to save up a large amount of money for a down payment.
Flexible Credit Requirements: Borrowers with less-than-perfect credit can still qualify for an FHA loan, as long as they meet certain criteria. The minimum credit score requirement for an FHA loan is typically 580.
More Flexible Qualification Criteria: FHA loans also allow for higher debt-to-income ratios than traditional loans, which means that borrowers can still qualify for a mortgage even if they have other outstanding debts.
Simple Refinances: Refinancing from FHA to FHA you can do a Streamline Refinance which has reduced costs and guidelines.
FHA Loan Requirements:
- The home you consider must be appraised by an FHA-approved appraiser
- You can only get a new FHA loan if the home purchased will be your primary residence
- You must occupy the property within 60-days of closing
- You will pay an Up Front Mortgage Insurance Premium (UFMIP) of 1.75% of the initial loan amount. The UFMIP can be rolled into your mortgage.
- You will pay a Mortgage Insurance Premium (MIP) for all FHA loans
Working with Montis Lending Group
- We work with a variety of lenders to provide you with competitive rates and flexible loan terms
- We average 15 days from Submission to Clear to Close
- Our experienced mortgage broker will work with you to find the best loan option that meets your specific needs and financial goals
**Montis Lending Group is not affiliated with or acting on behalf of or at the direction of FHA, VA, USDA or the Federal Government.