Finding the right fit when it comes to mortgage loan options can be a daunting task, especially if your credit history is less than perfect. Now, imagine with me a world in which you can find an easier credit qualifying process and low down payment options with a government-secured loan that allows lenders to give you a better deal. That world, dear readers, is here and now, and we in the business like to call it an FHA Loan.
What Is an FHA Loan?
An FHA Loan is a government program, offered by the Federal Housing Administration since 1934, to help people become homeowners.
Who Should Apply for an FHA Loan?
Are you buying your first home and/or looking for more flexible qualification and credit requirements in your mortgage? Have a down payment or equity that’s less than 20%? Want the comfort and security of a government-backed loan? If you said yes, yes and yes, then this type of loan may be exactly what you need.
If you currently have or want to buy a fixer-upper, there’s an FHA Loan option that allows you to buy or refinance a home, fix it up and include all the costs in one loan.
What Are the Features of an FHA Loan?
- 30-, 25-, 20- and 15-year terms are all available with fixed rates
- Credit scores as low as 580 may qualify
- 5-year adjustable rate mortgage available
- Refinance up to 97.75% of your primary home’s value
- Buy a home with as little as 3.5% down (primary home)
How Does It Work?
Now, your actual payment will vary based upon your individual situation and the interest rate when you apply. You can also pay your mortgage at any time without pre-payment penalties. How great is that?
If you currently have an FHA Loan and want to refinance, you may qualify for an FHA Streamline, which is as easy to use as it sounds! You could get a lower rate on your mortgage without the extensive qualification process. No appraisal and no minimal credit requirements. FHA Streamline is offered as a 5-year ARM (adjustable rate mortgage) or either a 15-year or 30-year fixed-rate loan.
Who Should Apply for an FHA Streamline?
You should, if you’re in an FHA loan now, your current mortgage rate is higher than today’s mortgage rates, and/or you owe more on your mortgage than your home is worth.
Have more questions or want to apply now? Our Home Loan Experts can help you decide which loan option makes sense for you.
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