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.

 

Teach Safety First
There is no denying the fact that the dangers out there are very real and your child is susceptible to them all. Luckily you can teach safety to help protect your little ones and keep them safe at any age as long as you are willing to take the necessary...
Readership Programs for Children
Readership Programs for Children The summer break may not always be beneficial to children. Studies show that children lose an average of one month of learning during the time off between school years. One way to counter this is to engross them in activities that...
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,...
Women Grants in The United States
A lot is being granted to the citizens of America in the name of grant scheme. Various categories of financial needs are being accomplished through these grants. Some of the most popular grants schemes ever are the grants for men, grants for women, grants...
Financial Aid: Grants for Women
 Thanks to thousands of grants, women who want to go back to college and earn a degree can do so without worrying about large tuition fees. Grants for women are available for single moms, minority women, and women that are going in to specific fields of...
Section 8 Housing | Where Do I Start?
Ok, what exactly is section 8 housing? Section 8 housing is also known as the Housing Choice Voucher Program. It is very fortunate here in the USA that housing assistance exists for low-income families, elderly, disabled and mentally challenged. The...
Understanding Federal Grants (Part 2)
 In the last issue we talked about how the federal grant system works and how you can make it work for you. In this issue we are going talk about exactly who's eligible to apply for federal grant money. The simple fact is that almost everyone is eligible...
Best Way to Build Your Credit Rating
In today’s world, credit can be easily destroyed. If you are young and entering the adult world, you may not always understand how to maintain a great credit rating. Often, you do not qualify for a loan or credit card due to having no credit. Lapses in employment or...
Natural Healing Options for Arthritis
Arthritis comes in various forms, but it's always painful. The typical medical approach is to take some sort of pain medication (usually non-steroidal anti-inflammatory drugs, or NASDs) that might result in various side effects, such as stomach pain. Thankfully, there...
How Does Renting to Own Really Work?
 In the years leading up to the financial crisis of 2007-08, the renting to own model — in which tenants/buyers have an option to purchase the house or condo they’re renting from their landlord/seller— was mostly offered by individual homeowners. In the...
Social Security Disability Benefit Application Help
 There are several advantages to applying for Social Security Benefits online. There is no need for an appointment and it will definitely save you time. Visitng your local Social Security Office can be very time consuming and frustrating. Read the...
Rent Assistance and Low Cost Housing
With todays economy fluctuating , many individuals and families are struggling to pay bills in a timely fashion, including their rent. The good news is that there are a variety of options available to anyone who is facing late fees, court dates or even...
Inexpensive Public School Alternatives
Sending kids to the public school a few blocks away is a simple task for some families. However, not all parents wish to follow this route. They may have concerns about the safety of the public school in the neighborhood, or they may want a different type of education...
4 Challenging Discussions (And How To Have Them)
It's not always easy to practice open and honest communication, especially with your family. Unfortunately, that lack of communication can have serious consequences. If you're having a hard time finding the courage to approach your family about an issue...
How Do You Repair Your Credit Score?
How Do You Repair Your Credit Score? You may be bombarded with ads for businesses telling you they can help fix your credit. Many companies say they have some kind of proven method for improving your credit score. However, you should first follow this advice and see...
Morning Habits for Success
Are you a morning person? Many people enjoy getting up at the sunrise and having a cup of coffee while they browse the web and others prefer to sleep in as long as possible but the most successful people in the world embrace the mornings and in fact there...
SNAP (Supplemental Nutrition Assistance Program)
The first nutrition assistance program was started in 1939. These types of programs were developed to help people during strenuous times and financial hardships. The program we know today (SNAP) was first introduced in 1961 as the Food Stamp Act that was...
The Facts You Need to Know About Payday Cash Advances
If you need money, it can feel as if there is no one to help you. It may feel like you're up a creek without a paddle. Luckily, you can get payday cash advances to help you out. Research all companies that you are considering. Find a lender that fits you...
Find The Best Section 8 Homes & Rentals
Find The Best Section 8 Homes & Rentals Are you feeling a little frustrated searching for Section 8 homes and rental property? Below is a list of multiple Section 8 housing resources. These are not in any particular order. These are just eight very good resources...
Affordable Health Insurance
Is finding affordable health insurance as improbable as encountering a unicorn walking across your back lawn? It doesn't have to be. Here are seven steps you can take to lower your costs.   1. Understand your options to buying affordable health...

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