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.

 

How to Find Bargains at Flea Markets
I love to spend hours looking at flea markets for different items. Different vendors set up their products in a central location so that consumers can spend their time walking around and see the new and used items available for sale. You never know what you will come...
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...
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...
5 Common Ways Families Overspend
If you are looking for ways to free up extra money in your family budget, you are not alone. You may be eager to use any extra money that you can find for debt reduction, savings, or other goals. While it may seem as though there is little or no extra room to scale...
How To Find Good Insurance Companies
 Insurance is a part of life whether you’re looking to protect your life, home, or automobile. All insurance companies are not equal. Working with a good insurance company is just as, if not more, important as having coverage. Here are four things to keep...
Receiving $4000 in Home Rebates
 Are there any home improvements that you have been contemplating lately? Are you struggling to make ends meet already? Learn more about three Programs a that could help you and millions of homeowners qualify for a $4,000 rebate. These Are Very Tough...
Things You Need to Know About Section 8 Assistance
Things You Need to Know About Section 8 Housing Some families might find a safe, decent and affordable housing as a big challenge to tackle. Majority of regions in the United States do not have rent control laws in place. Therefore some renters find affording a...
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,...
The Most Common Reasons for Debt
 High debt balances can create significant stress, negatively impact not only your future, but it can also impact your health. It can prevent you from enjoying the quality of life that you otherwise may enjoy without the burden of debt payments. While...
HARP Eligibility and Assistance
 If your mortgage is making your financial life more difficult than you expected, you can get assistance through a program called HARP (Home Affordable Refinance Program). HARP eligibility is easy to determine as there are several factors that can affect...
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...
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...
The Greatness of Good Friday
 What a supreme paradox. We now call the day Jesus was crucified, Good.Many believe this name simply evolved—as language does. They point to the earlier designation, "God's Friday," as its root. (This seems a reasonable conjecture, given that "goodbye"...
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...
Free Cell Phones: Avoid The Trap
Cell phones are becoming very sophisticated with the advancement in the technology. Today the cell phones come with lot of mind-boggling kinds of features on them. Due to the increasing competition between the handset manufacturers and the service providers, lots of...
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,...
Car Shopping and Ways To Pay for It
A franchised new car dealership is a reliable, if not the only, source for anyone who wants to buy a new car.  But to those who prefer buying used or previously owned cars, there are plenty of options and sources one could choose from to be able to make...
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...
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...
Home Improvement Grants
 Is your home desperate for repairs? Are you at your financial limits, broke...flat broke? Have you ever wondered how it would feel to have the government help you be able to afford these critical repairs? Help is possible through new home improvement...

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 Name and Email for Best Results

Due to the overwhelming response, enter your email for best results. Look for your free ebooks from New Flex Career!

You Are On Your Way!

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 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!

Pin It on Pinterest

The More You Share. The More We Can Help!

Share these posts & pages with friends!