The FHA and Home Loans

by | Housing Information

 The Federal Housing Administration (FHA) insures mortgages on loans provided through FHA-approved lenders. Since its creation in 1934, the FHA has insured tens of millions of homes for families in the United States. These mortgage insurances protect lenders from losses that occur as a result of defaults on home loans. Here is how the FHA might be able to help you.

 

What the FHA does

The FHA does not directly issue loans, but rather it insures mortgages, types of loans that are secured and tied to the property. The FHA reduces the risk for lenders while providing better borrowing power to qualified applicants. It ensures that borrowers will receive lower interest rates. The FHA also enables borrowers to see decreased lower closing costs. Closing costs include appraisal fees, title searches, surveys, taxes, and appraisal fees that occur when purchasing a home. The FHA also provides loan counseling and is able connect you to lenders and local agencies to assist you in finding a home loan.

 

Who Qualifies?

FHA-insured mortgages often help newly-married couples, graduates with little credit history, and borrowers who have dealt with bankruptcy or foreclosure in the past. They are designed to protect borrowers get on their feet without paying high interest rates.
Any borrower with a credit score over 500 qualifies for an FHA-approved loan. If your credit score is between 500 and 579, you will be required to pay at least a 10% down payment on the home. If your credit score is 580 or above, you will only have to pay a 3.5% down payment. Here are a few other requirements:

• You must have a steady employment history or have worked for the same employer for the last two years.

• You must have a valid social security number, legal residency, and be of legal age to sign a mortgage.

• The mortgage must be for your primary residence, meaning it cannot be used for a summer or vacation home.

• You must be at least two years out of bankruptcy and have reestablished your credit. An exception may be made if you are one year removed from a bankruptcy that was not your fault.

• You must be three years removed from foreclosure and have reestablished good credit. Exceptions may be made for extenuating circumstances.

• The home must meet minimum standards at appraisal. Appraisal of the home is required by the FHA.
Loan Limits

The FHA sets limits on the amount that may be borrowed. These limits vary state to state, but some counties will allow you to borrow an amount up to $729,750. These limits increased in 2017.

 

 

Mortgage Insurance Premiums (MIP)

Because of the protections afforded by the FHA, these loans require two types of premiums. One is paid in full up-front, while the other is paid monthly. The up-front payment may be financed into the mortgage.

The upfront mortgage insurance premium (UFMIP) is a one-time payment that may also be folded into the mortgage. Borrowers must pay a premium of 1.75% of the home loan. For example, a $400,000 loan would require a $7000 premium.

The annual mortgage insurance premium is actually a monthly charge, despite its name. It is based upon several factors such as the loan-to-value (LTV) ratio, loan size, and length of the loan. For example, a loan over 15 years for $625,000 or less and an LTV ratio of 95% or less would have a .80% annual MIP.

 

Interest Rates

The interest rates for FHA-approved loans will vary depending on credit score, employment, and other factors. FHA-insured mortgages keep that rate lower than home loans that are not insured. The average mortgage rate in mid-February of 2017 stood at 5.04% on a 30-year fixed rate loan.

Buying a home is a complicated process. The financial situations of many Americans have suffered as a result of recession and other factors over the last decade. The FHA can help by providing many people with lower credit scores the opportunity to find a mortgage at a lower rate than they would find otherwise. If you believe that you might qualify for an FHA-approved mortgage, follow the link below to get started.
https://portal.hud.gov/hudportal/HUD?src=/buying/loans

The FHA provides loan counselors to potential borrowers and the resources to contact FHA agencies in local areas. You may qualify through the FHA when other institutions turn you down. Do not let past financial difficulty get in the way of purchasing a home.

 

Social Security Disability Assistance
 Social Security Disability Insurance pays benefits to you and certain members of your family if worked long enough and paid Social Security taxes. Supplemental Security Income pays benefits based on financial need. If you need help and personal guidance...
Which Student Loan Repayment Options Work for You?
Which Student Loan Repayment Options Work for You? The student loan process can be tricky and difficult to understand. Students often overlook the process from the beginning of college until graduation, never realizing the impact of the loans until payment become due...
The AHCA Impact on Medicare & Medicaid
The Impact on Medicare & Medicaid The repeal and replace legislation concerning the Affordable Care Act (ACA), or Obamacare, seems complicated for many consumers. Though it will likely see changes as it is debated in the Senate, the American Healthcare Act (AHCA)...
Social Security Disability Benefits
Sometimes in life, events occur that prevent people from working in order to make a living. Accidents occur and illness strikes at the most inopportune moments. The Social Security Administration may be able to help. They provide disability benefits to...
Best and Worst Student Loan Services
Best and Worst Student Loan Services This is the time of year when hundreds of thousands of Americans begin to prepare for their first semester in college. They begin to seek out the items that will sustain them during dorm life. Parents spend money on new sheets, hot...
Car Loans Approved Today!
Drivers will be excited to hear that the cost of a vehicle has started a downward plunge making it even easier to get the car loans you have always wanted. According to predictions by GasBuddy, the average price for a gallon of gasoline is set to fall...
Finding Employment with Job Searches
Finding Employment with Job Searches Sometimes, life hits Americans hard. With ups and downs in the economy, it may be difficult to maintain consistent employment over a long period of time. Fortunately, there are options to help find a new job or career. In the...
Save Money When Grocery Shopping
 It is a good idea to be aware of the amount of money that we spend on items when we go grocery shopping on a regular basis. When times are tough, it is this knowledge that can help us to survive on less income than usual, which can help in a big way if we...
Penny Pinching Groceries Plus Earning While Shopping
Penny Pinching your way into savings and earning! If you feel like you are wasting money on groceries then you're not alone. The average American spends around $160 per week at the supermarket. What if I told you that number can be easily cut in half by penny pinching...
Is Rent to Own Housing An Option?
Rent to own housing is a popular term that should be carefully considered. It can be an agreement between owner and seller to rent or lease a property until it is paid in full. The plan can work several different ways, some have zero deposits and no...
Examine Failures and Find Inspiration
How to Examine Failures and Use it as Inspiration Sometimes, when we fail, it can feel like the end of the world. None of us like to be told that we are doing something wrong. None of us like to experience setbacks in our plans. It can make us question our self-worth,...
Unpaid Wages Recovery Guide
If you worked for it, then you should get all upaid wages. Everyday can be a struggle and still come up on the short end of the stick. That is why you may be frustrated when you are not paid the money you are owed. Fortunately, there are many steps that you can take...
Tips for Insurance Discounts
Home insurance and automobile insurance might be must-haves, but it doesn’t have to cost you an arm and a leg to have the appropriate coverages. There are things you can do to get discounts on your homeowners insurance and automobile insurance. Here are...
Which Protection Is Best?
Keep Your Information Safe! Makes A Great Christmas Present! Credit card numbers are sacred these days. We’d never give them out to a stranger because credit card fraud and stolen identities are never more than one mistake away. But what if I told you that somebody...
How A Home Warranty Will Save You Money
A Home Warranty Will Save You Money Owning a home can be expensive. Appliances break down, and air conditioners tend to quit working in the middle of the summer. In fact, most home have a major mechanical breakdown twice each year. Usually, these breakdowns occur at...
Five Great Resources for Working from Home
 There have been thousands of people watching “Good Morning America” who have sent us messages thanking us for helping them make the money while working from home. For anyone who hasn’t yet taken the leap forward but feel as though you might be ready,...
Searching for Online and Freelance Employment
Searching for Online & Freelance Employment Many career fields and skills do not fall under traditional frameworks for employment. Writers, photographers, marketers, teachers and artists may be able to find work as online freelancers to continue improving their...
Best Advice for Seeking Employment
Your career and life depend on you taking the time to learn all that you can about earning gainful employment. You cannot get a job without finding the right approach that will open up opportunities. Keep reading if you wish to learn more. Speak with...
Run A Background Check When Applying for Jobs!
 Social media is everywhere in the air around us today. Hence it is natural for you to assume you can handpick and choose what you want your employees to see. Most people therefore imagine that once they clean up their Facebook wall and delete those...
Step By Step Guide To Debt Repair & Rebuilding Credit
Step By Step Guide To Debt Repair & Rebuilding Credit A severe debt situation is a huge financial misfortune that can ruin your ideal credit scores. If you are bothered by this excruciating condition, never worry. You are not alone in this regard. During the...

The Premier Forex League

Subscribe

Family Picnic

Enter Your Email for Best Results

Due to the overwhelming response, please enter your name and email to ensure the proper search results.

You Are On Your Way!

Family Picnic

Enter Your Email to Receive New Assistance Updates

Due to the overwhelming response, please enter your name and email to ensure proper results.

Thank You! You will now receive the latest assistance updates!

Family Picnic

Enter Your Email for Best Results

Due to the overwhelming response, please enter your name and email to ensure the proper search results.

You Are On Your Way!

Pin It on Pinterest

Share This