Federal Housing Administration (FHA) home loans are a great option for many homebuyers and homeowners looking to purchase or refinance in Ogden, Utah. FHA home loans are specifically useful to borrowers who cannot make a big down payment, who want low monthly payments, whose credit is not great and qualifying for a conventional loan is difficult for them.
Congress created the FHA in 1934 and it became part of the Department of Housing and Urban Development (HUD) in 1965. The FHA is not a lender. The FHA is the largest insurer of mortgages in the world. Lenders are insured by the FHA against losses as a result of a homeowner defaulting on their mortgage loan. It insures single and multifamily homes including manufactured homes and hospitals. The FHA is the only government agency that does not cost the taxpayers anything operating entirely from the proceeds from its mortgage insurance which is initially part of the mortgage payment.
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. With the recent subprime lending collapse, the FHA home loans have become cool again, as mortgage lenders and brokers are flocking to the latest FHA loan programs. FHA has been around for decades, and there are many innovative programs to help different segments of the population to realize the dream of home ownership. A common misconception is that FHA home loans are for first time homebuyers. The fact is you can only have one FHA loan at a time whether it's your second home or fifth. The mortgage limits for FHA home loans are set on an area-by-area or county-by-county basis.
This type of insurance is an attractive benefit for FHA approved and authorized lenders. If the homeowner defaults, the lender gets its money from the FHA. The lender or broker works with prospects to qualify their loan application to FHA guidelines for approval for this insurance for the loan.
FHA loan guidelines also provide attractive benefits to home buyers as qualification is usually less stringent than conventional loans. Plus, all FHA home loans are FULLY assumable, adding one more layer of protection for you and your family. Having an assumable loan at a good interest rate would be part of a good plan for selling your house in the future especially if the interest rates have gone up.
The following two FHA loan requirements are important for qualifying: Housing expenses should not exceed 29% of your gross income; total indebtedness should not exceed 41% of your income. FHA home loans require a smaller down payment as well. Down payments for FHA home loans are low, generally 5% or even as low as 3.5%. The finance package in a nutshell is: FHA insurance + lender financing = FHA loan. Ask your lender for assistance in learning which FHA mortgage is right for you.
FHA home loans are available in rural and urban areas. FHA home loans are not loans granted by the government, but FHA home loans are mortgage loans that are guaranteed by the Federal Government. FHA home loans are generally offered at reasonable interest rates, and guarantee the mortgage company that the loan will be paid. So whether you are refinancing, buying your first home or your fifth, try out FHA.
FHA's Energy Efficient Mortgage program (EEM) in Fontana helps families save money on their utility bills by enabling them to finance energy efficient improvements with their FHA-insured mortgage. The EEM program recognizes that an energy-efficient home will have lower operating costs, making it more affordable for the homeowners. Cost-effective energy improvements can lower utility bills and make more income available for the mortgage payment.
FHA stands for Federal Housing Administration and the is to help stimulate the housing market by making home loans more accessible and affordable for those individuals to make homeownership a reality.For 1st time home buyers looking to buy a house, this is a great home loan program to start with, if you have credit scores in the high 500s or low 600s this is a great program for you. FHA is much more flexible in terms of credit scores than Conventional will be. That are 2 areas of the the credit all lending programs are concerned with are, the credit score and what is in the body of the credit. You may have lendable credit but miss the mark on what is in the body of the credit like collections, judgements, short sale, foreclosure, late pays, etc...FHA will allow a higher debt to income ratio than Conventional will, once we run your loan scenario through the DU FHA Score Card, it will approve you at the highest debt ratio based on the strength of the file like credit scores and liquid reserves. An FHA underwriter still will need to review the income to determine accurate debt ratios.Down payment assistance home loan programs are available for all types of home lending but geared more towards FHA loan programs. To see if you are available for any and all types of down payment programs click HERE and complete the short questionnaire form to see what is available for you to take advantage of.The down payment can come from many sources such as, gift from a family member, retirement program, sell of something of value with proper documentation for the paper trail, down payment assistance program (not limited to first time home buyers), combine 2 more down payment assistance programs to purchase a home, we can always find money for the down payment and closing cost.FHA lowered the monthly mortgage insurance on January 26th 2015 from 1.35% to .85% with less than 5% for the down payment. This allows buyers to purchase a little higher in price point, that was a big move for HUD to lower that premium, making housing much more affordable for buyers. Co-Signers are also allowed when applying for a FHA home loan when buying a house. The co-signer can be a non-occupant co-signer, which means they do not need to live in the property with the primary applicant. The co-signer must also qualify as well with their income and credit. So when bringing in an additional applicant make sure they are just as strong as you are. As the guidelines stand today with the down payment are, if you put less than 10% down the monthly mortgage remain in the payment through the 30 year term. If you were to put 10% or more for the down payment the mortgage insurance will drop off after 11 years and you are at 78% of the original purchase amount or the appraised value which ever was less at the time you closed escrow on your property. If you put less than 10% down, the only way to have the mortgage insurance remove is that you must refinance out of the FHA loan and into a Conventional loan. Still an excellent loan programs that offers as little as 3.5% down or .5% down coupled with a down payment assistance home loan program in California.Once in the FHA program, you can refinance into a lower payment without a credit report, appraisal or income documentation, making the refinance that much smoother to process. Each lender will have their own guidelines when it comes to this program known as the FHA Streamline Refinance Home Loan Program. Need to check with a loan officer to see what they require.Each applicant must have their loan application reviewed and processed according each mortgage lender's underwriting guidelines. FHA has their basic underwriting matrixes but each lender may add to those matrixes. I welcome the opportunity to speak or meet with you to discuss your plans and goals about this great home loan for homebuyers looking to work with a seasoned licensed loan officer. FHA home loans in Ontario CA for purchase and refinance lending, FHA is perfect for first time home buyers with low credit scores or limited funds to own a house. We offer this program along with many other direct home loan programs in California. Contact me at 909-503-5600 or email me HERE.