Within the government’s Housing and Urban Development (HUD) program operates the Federal Housing Administration (FHA), which has the primary responsibility for administering the government home loan insurance program. This program allows a first time home buyer who might otherwise not qualify for a home loan to obtain one because the risk is removed from the lender by FHA who insures the loan for the lender. The credit qualifying criteria for a borrower are not as strict as conventional loan financing and the down payment or Equity requirements are less.
There are many reasons why an FHA loan might be right for you. Here at EMG Mortgage, we will work with each individual client to ensure that you understand these features.
Flexible Credit
Although, FHA loans are not score driven, the minimum credit score ranges from 560 – 640 depending on each investor’s requirement. FHA loans are underwritten in a way that gives the borrower the benefit of the doubt and evaluates other factors in addition to score. FHA loan guidelines are written with the consumer in mind. It takes into consideration that borrowers are human and may have extenuating circumstances which caused the credit score to go down. With that mind, letters of explanations are required and considered on every individual borrower. As long as the borrower has made an honest effort to rectify the circumstances and recovered from the situation, they’re generally going to be credit-eligible for an FHA loan.
Great Rates and Low Monthly Mortgage Insurance
A distinct advantage of an FHA insured loan, as compared to a conforming loan, is great interest rates and lower monthly mortgage insurance (MI). Depending on the program, standard FHA loan interest rates are usually better than a conforming 30-Year Fixed loan
Safest ARM Currently Available on the Market
FHA guidelines give you the option of doing hybrid Adjustable Rate Mortgages (ARM), including a 3/1 ARM and a one year ARM that has the lowest adjustment caps of any ARM in the industry
Variety of Property Types Allowed
While FHA Guidelines do require that the property be Owner Occupied (O/O), they do allow you to purchase condos, planned unit developments, manufactured homes, and 1-4 family residences, in which the borrower intends to occupy one part of the multi-unit residence.
Streamlined Refinance and Assumable Loans
One of the most important advantages of an FHA loan is the ability for the loan to be assumed. This gives the buyer a significant advantage in a high interest rate market. FHA loans are eligible for streamlined refinance, a program HUD offers that allows the borrower to easily refinance the loan to reduce their interest rate and lower their monthly payment.
FHA Loan FAQs
If you’re in search of information on FHA loans, EMG MORTGAGE can help! Here are our most frequently asked questions about FHA home loans.
What are FHA loans?
FHA stands for Federal Housing Authority. A Federal Housing Authority loan provides low-cost insured home mortgage loans that suit a variety of purchasing options. Whether you’re buying a home or want or refinance your mortgage, FHA loans might be right for you. If you’re unsure about your credit rating, or have concerns about a down payment, EMG MORTGAGE’S FHA loans can give you piece of mind with super low closing costs and flexible payment options.
How do I qualify for FHA loans?
To be eligible for Federal Housing Authority loans, your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income. Your credit background will be fairly considered. You must be able to make a down payment, cover closing costs and have enough income to pay your monthly debt. Call EMG MORTGAGE to discuss your FHA loan eligibility.
What is the cost of FHA home loans?
Interest rates on all home mortgage loans vary according to the economic climate of the country. FHA home loans offer better than standard rates and lower monthly mortgage insurance premiums. Depending on the program, standard FHA home loan interest rates are usually better than a conforming 30-year fixed loan. Call us today for more information on FHA loans.
Can I use FHA loans for home repairs?
Yes! Simple home improvements can be financed with a Federal Housing Authority loan from EMG MORTGAGE. Roof repair, disability accessibility improvements, flooring refurbishment, or the purchase of new appliances are just a few eligible improvements you could make with FHA loans. Ask our experts if your project qualifies for an FHA loan.
Are FHA mortgage loans assumable and can they be refinanced?
Yes & yes! One of the greatest advantages of EMG MORTGAGE’S FHA mortgage loans is the ability for the loan to be assumed. This allows the buyer a significant advantage in a high-interest rate market, and affords you an excellent sales advantage over your competition. FHA mortgage loans are also eligible for streamlined refinancing, offering you a lower than standard interest rate, which can lower your monthly payment. Streamlined FHA mortgage loans are an excellent selling feature when you’re ready to move up or move on.
Need more information? Give us a call at 229-420-9364 to start your pre-approval today!
