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.

 

Positive Thinking Can Change Your Life
Positive Thinking Can Change Your Life Enthusiasm Is Positive Energy “No pessimist ever discovered the secret of the stars, or sailed to an uncharted land, or opened a new doorway for the human spirit.” - Helen Keller Enthusiasm is the sunshine of your mind’s garden....
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...
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...
Feeling Lost? Free (Or Cheap) Career Assessment Tools
In today's world, more people are struggling to pay/find for housing, medical bills, education, and other aspects of life. As a result, embarking on a new career is becoming a popular option to better themselves and their families. However, when choosing a new career,...
4 Most Challenging Discussions You Can Have With Family (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 you're...
Affordable Housing Problems
On 1st Street in Santa Ana — not far from where authorities recently cleared a tent encampment along the Santa Ana River near Angel Stadium — developer Caleb Roope wants to build nearly 1,000 apartments that will be affordable for low-income seniors and...
Are Discount Stores Really A Bargain?
It seems like dollar stores and other various discount stores are becoming a common retailer in most areas. Can these discount stores really offer you a bargain or do they just sell poor quality items? In my opinion, there are plenty of great bargains to be found in...
Section 8 Vouchers Less Likely to be Accepted
 About 300 less, that is the number in Nashville, TN. Since 2010 there has been 300 fewer Section 8 vouchers accepted throughout the Greater Nashville Area. Families are being kicked out of their apartments and housing because the owners have just decided...
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...
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...
How To Get A Work-From-Home Job and Earn $275 Per Day
How To Get A Work-From-Home Job & Earn $275 Per Day There are many advantages to working from home. There's no expensive and time-consuming commute, for example, and it's also possible to work from home while juggling other responsibilities. However, while many...
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...
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"...
Budget Tips for Today’s Family
If you are in charge of creating the family budget, chances are, you’ve had the unfortunate experience of having a brilliant budget plan that isn’t executed well. This happens to many families and couples, and with a little attitude tweaking, you can solicit the help...
Lifeline Assistance Program
 There is now a program out there that can even help with your cell phone. The special government program called Lifeline Assistance that offers a free phone and minutes to those who qualify. Getting on the list is not very hard, but there are a few things...
Easy Formula for Grant Applications
When you look forward to apply for a government grant, you will need to do a lot of research and make elaborate preparations. To give a kick start to your grant seeking process, fist you must understand the different types of grants available. You will...
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...
Is Public Housing An Option for You?
The US Department of Housing and Urban Development (HUD) utilizes several programs to ensure housing for lower-income families. One of these programs is Public Housing. This program was designed to provide decent and safe rental homes for lower-income...
The Best Self Help Gurus
In the world today, it is easy to come across scammers looking to take advantage of people in their weakest moments. The realm of self-help is no different. In fact, it can be much worse. Self-help scammers apply abstract concepts so that unsuspecting people will fork...
The FHA and Home Loans
 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...

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!