If we really think about it, there are many reasons you should ask for an FHA loan. Especially if you’re a first time home buyer. Let’s consider some of the best.

Here are 5 good reasons:

Easier to qualify for the loan You do not need perfect credit Very low down payment Costs are lower You keep your home

Ok, now we can look at these in greater detail. Then you can see why asking for an FHA loan may be your best option.

Easier to Qualify For the Loan

FHA is not the actual lender. They are a government run program that insures the lender that they will get their money if you do not pay. So they have less risk than a conventional loan. A conventional loan is normally insured up to 90% of the loan amount (by a private mortgage insurance source) where as FHA is insured up to about 97%.

So it takes less for you to qualify since the lender is guaranteed by the United States Department of Housing and Urban Development (or HUD) that there is no real risk to the lender so they will be more likely to take a chance on borrowers with less than perfect credit. This brings me to the next point.

You Do Not Need Perfect Credit

At one time, a few years ago you could get and FHA loan with no credit scores at all. This was great for borrowers who had not established credit in the conventional methods. However you could still use alternative credit like rent, cell phones, utility bills etc.

Now FHA wants you to have a credit score of at least 580-620. If you do not have a score it will be much more difficult to get a loan if at all.

So be sure you are building credit now, use a credit card but pay it off each month. If you have student loans, this will work also, just be sure to keep your payments on time. The same goes for medical bills.

You cannot have more than 2 accounts that are over 30 days late in the past 2 years.

Very Low Down Payment

So again, what ask for an FHA loan? How about the low down payment of just 3.5%? To top that off it can be a gift from your parents or a charity. Only FHA loans allow this as far as I know.

There are many ways to work at raising this money. You either save it yourself, get a gift from the parents or have a charity give it to you. I know what you’re thinking, how do I get a charity to give it to me. Well, that’s for another article.

Costs are Lower

FHA loans offer great interest rates. Compare them to the conventional loan to see for yourself that this is true. Compare the FHA interest rate with several lenders and you may find some that are lower.

You may find it just a little above the conventional loan. For example if the conventional loan is 6% the FHA loan may be around 6.5%.

What you need to keep in mind is that FHA loan rates have not varied much over the years. I bought my first house in 1978 and my interest rate was 7.75%

You Keep Your Home

HUD does not want your house back. They want you to stay in it until you pay it off or sell it. That’s why they insure the loan to project the lender ad you. Since 1934 they have been doing this and it’s a good bet they will continue to do so.

Conclusion

While FHA loans may not be for everybody, they do order many benefits. When you look at the simple qualifications, low credit requirements, easy down payment, great interest rates and the insurance to the lender it makes for a great reason to ask for an FHA loan.

 FHA mortgage programs were created to help increase homeownership. FHA loans are less expensive than other mortgage home loan programs. The FHA program has evolved since it started in 1934 and now has options for HUD insured loans that fit a variety of different borrowers and situations. Here are just some Examples of how FHA can help you buy a Florida home,

Minimal Down Payment and Closing Costs

·    Down payment less than 3.5% of Sales Price with 100% Financing options available

·    No reserves or required.

·    FHA regulated closing costs.

·    Seller can credit up to 6% of sales price towards buyers costs.

Easier Credit Qualifying Guidelines such as:

·    No minimum Credit score or needed credit score requirement.

·    FHA will allow a home purchase 2 years after a Bankruptcy.

·    FHA will allow a home purchase  3 years after a Foreclosure. 

Easier Debt Ratio & Job Requirement Guidelines such as:

·    Higher Debt Ratio’s than other home loan programs.

·    Less than two years on the job is allowed.

·    Self-Employed individuals o.k.

FHA loans for Florida first time home buyers have key advantages including:

Easy Qualification – The FHA loan insures lenders against loss for loans made to properly qualified FHA home loan borrowers. So you’re likely to find FHA mortgage loans with terms that make it easier for you to qualify.

Minimal Down payment Requirements – FHA mortgages can work with as little as 3.5% down and those funds can come from a family member, charity, or your employer. Although the FHA loan does not have a zero down mortgage option yet, you will find that your 1st Continental Mortgage loan officer can point you to many Down payment assistance programs that work well with Florida FHA home loans.

Less than A-1 Credit is Okay – The Florida FHA home loan program exists to expand the pool of home buyers. Even borrowers with prior bankruptcies or mortgage lates get approved every day for FHA mortgages to buy or Refinance homes in Hillsborough County or any of the other Florida counties we serve. The FHA loan program uses credit quality, not credit score!

Lower Cost Over the Life of the Loan – The Florida FHA home loan rates are extraordinarily competitive. FHA’s lower risk to the lender means a better rate for the borrower.

Safeguards for Borrowers Who Get Behind – The Florida FHA loan mortgages also allow the lender more options in helping borrowers who fall behind keep their homes are get current again: special forbearance, workouts, even free mortgage counseling. Further, HUD can allow the lender to take past due payments and move them to the end of the loan and in some instance will actually pay your past due payments for you. Options to save your home you’ll never get from a conventional loan! In an uncertain world, this is another excellent reason for you to get an FHA mortgage.

Options for Manufactured Housing – Under certain conditions, you can even finance a Mobile Home or manufactured home using a Florida FHA mortgage loan. Call 1-800-570-0448 to get pre-approved for a Florida FHA loan for manufactured housing or just use our quick application to learn more!

FHA Loans Are Fully Assumable – When you are ready to sell your home, you can offer buyers FHA financing! All FHA loans can be assumed by qualified buyers.

These are just seven of the many good reasons to apply for an FHA mortgage. Visit www.FHAmortgageprograms.com speak with a friendly Florida FHA loan specialist now!

Do you think they will go down again?

I would like to know the wholesale company that does the lending, not the broker.

I am waiting to lock my rate – do you think rates will go up or down over the next 2 weeks….Thank you!

Also, what are the pros and cons of an FHA mortgage?

Everyone has been asking what the FHA loan rates are, but keep in mind that the absolute lowest rate is not always available.  When getting qualified for an FHA loan, they must be qualified at the highest FHAloan rate to ensure that the correct parameters have been met.

You can use an FHA calculator to plug in different rates so you can see what different payments are going to look like. While interest rates haven’t reached 1%, they are the lowest they have been in years.  With the large inventory of homes that you have to choose from, finding a home you like should be an easier task.  This simply depends upon the town you are looking, and how much you can afford.

Keep in mind that when looking for FHA loan rates, the loans are not actually funded by FHA.  They just simply the insure the loan for the lender when the borrower defaults on the loan.  You need to find a professional that works with FHA loans so that they can tell you what the FHA loan rates are currently.

There are adjustable rates, but FHA typically doesn’t produce a lot of variable rate loans.  The FHA loan rates are low enough right now, that you should really consider getting into a fixed rate loan, that way you will not have to refinance ever again.  I can say with experience, having been in the business for over 19 years that I have not seen the rates so low. I am confident that if you were to refinance or buy a home this year, you are going to have a rate you will want to hang onto.

Recently, I have seen FHA rates as low as 4.72% on a 30 year fixed mortgage. It has been interesting to see what the market has done over the past few years.  Although it has been a tough market, and homeowners have struggled, there are many programs that have been implemented to help them, and the market fell in favor of those who were looking to buy that last year weren’t considering it.

According to Bankrate.com, the 30 year fixed mortgage rates are at 4.125% today, and the 15 year is at 3.75.  This is a really interesting diversion from the 6.25% we were looking at two to three years ago.  Keep in mind too, that your FHA rates might vary according to state, due to the market in your state.

For more information, you can visit www.fhaloansnow.net.  Happy rate shopping!

Getting an FHA Purchase Loan

There are so many reasons to choose an FHA purchase loan, before looking at other options. One of the main reasons is when you are a first time homebuyer, you may not have a lot of money to put down on the house. With FHA you can put down as little as 3.5% down, and the seller can also contribute up to 3% as well. With the rates as low as 5.75%, you can definitely keep your payments low and more manageable.

Why Choose FHA Over Conventional?

An FHA purchase loan gives you benefits that you can’t with other conventional loans. The main one is the competitive low interest rates. Rates have not been this low in 50 years, and the average FHA rate is around 5.75%.  The rates are lower because the government insures these loans for lenders.

FHA purchase loans also give you the option of a lower down payment, being as low as 3.5% down, versus a conventional loan which requires a minimum of 10% down or more. Your down payment can be the result of gifted funds from a family member or friend, or even a charitable organization. With a conventional loan, everything must be verified which can make for a hectic paper trail.

In addition, you don’t have to be perfect to get an FHA loan. While you still have to qualify you won’t have to have perfect credit. In fact, it is easier for you to qualify after having had a bankruptcy in your past or even medical collections. Don’t let that deter you from applying for a loan, and if you don’t qualify I will tell you why so that you know what steps you need to take in order to do so. FHA structures their guidelines so that it uses commonsense underwriting guidelines.

What Types of Purchase Loans are Available?

Almost all FHA purchase loans are fixed rate mortgages, so your rate will never ever change during the life of your loan. FHA has a long history in fact they have been around since 1934, so they are in this for the long haul. It’s nice to know that if you come upon hard times, that there is assistance with FHA. Hopefully, that is something that you will never encounter, but FHA makes those options available for you just in case.

What are the Steps for an FHA Purchase?

The most important step when considering an FHA purchase loan is to know how much you can afford. There is a very specific calculation that is used to compare your current gross income to your existing debts in order to determine the maximum loan amount that you qualify for. Determining what you can afford, will also be determined by your down payment and interest rate.

Trying to determine just how much you can get for a maximum loan amount may not be the wisest consideration, but you need to be realistic about the monthly payment that you are comfortable with. It is all about having a personal budget and if you don’t have that worked out it cause you a lot of problems.  When you visit our website, you should really take the time to use our FHA mortgage calculator. That will show you what numbers to plug in so you can accurately determine what you qualify for. In addition, double check the county you live in for the FHA lending limits.

The next step is to get prequalified before you start shopping for a home. This is the essential step, and realtors won’t work with you until they know that you have a prequalification in hand. Once you have that, you can begin the process of searching through a wide array of homes. Then, once you have found one you are interested in you can make an offer.

For more information on FHA, or to being your FHA purchase loan qualification, just visit www.fhaloansnow.net, and fill out the form today. It only takes a few minutes to complete.

I was told for an FHA loan it is 6.25%. Someone else tells me that it’s 7% for a conventional and FHA. Is the rate different the higher your FICO score is?
0 down, FICO score 640, Debt $8900 car, $1000 credit cards, Excellent credit history, BK 2 years ago. Loan amount $245.
Excellent credit history since BK.