FHA Loans & Mortgages

FHA Loans and mortgages are one of the top 4 types of home loans most home buyers seek out. Is one right for you? Well that is a complex question and needs to be addressed by a professional and knowledgeable loan officer. A great loan officer will ask a lot of questions, share information and help guide you to the loan option which is best for you at that time. Keep in mind when life changes you can also always apply for another loan after you own the house. Many first time home buyer's do just that after a year or two.

Get Pre Approved

Because choosing a loan is really more complicated than it seems on the surface I will go over some of the basic information about FHA loans. This way when you reach out to your loan officer you will be able to hit the ground running and at least know if you qualify or not etc. One thing to know right up front is FHA loans are easier to get than conventional loans. That is not necessarily a good thing, for some however it is a god-send.

In order to qualify for a FHA home loan or mortgage as so many refer to it here are some of the initial qualifications. Meeting them is necessary but just meeting the ones I share with you does not necessarily mean you will be approved.

• 3.5% down minimum is required.
• 500 minimum credit score with a 10% down payment
• 580 minimum credit score to get that 3.5% down payment approval.
• The amount you want to borrow must be under the FHA limit for that county.
• The home must pass a FHA home inspection.
• Debt to Income Ratio of less than 50%. That can vary by lender.
• You must occupy the home at least for the first year of ownership.

FHA Mortgage Insurance

All FHA loans must have two types of mortgage insurance. 

1. Annual Mortgage Insurance Premium (MIP).
2. Up Front Mortgage Insurance Premium (UFMIP).

The MIP costs .45% to 1.05% of your total loan amount. The UFMIP costs 1.75% of your total loan amount but most lenders will allow you to roll these coasts into your loan and not be paid up front. Most home buyers will ask if they can ever have the MIP dropped. For example if they ever reach 0ver 20% equity in the home and a certified appraiser confirms it. Well that is somewhat complicated according to HUD. Some lenders will not allow it. Once you reach that 20% equity point you will have the option of re-financing anyway. 

Selecting The Right Lender/ Loan Officer

One of the most overlooked steps in financing is how vital it is to have the right loan officer. Trust me when I say they are not all created equally and neither do they perform equally. Unfortunately you cant really tell when you start the process. I definitely have a recommendation and you can use the blue "Get Pre-Approved" link up above to have me contact them for you. Thanks for reading this article and feel free to link to it and share it with reckless abandon. Reach out to us about your FHA home loan.