FHA Loans

Residential FHA Loans

What are FHA Loans?

An FHA-insured loan is a mortgage loan backed by the US Federal Housing Administration and supplied by an FHA licensed lender. Lenders are protected by FHA mortgage insurance.

What benefits can I get from an FHA Loan?

Some of the primary advantages of an FHA loan include the ability to qualify with a credit score as low as 500, a DTI ratio of more than 50%, the ability to add a co-income borrower to get approved even if the co-borrower will not reside in the home, and a low-down payment.

A few reasons an FHA loan would be a good choice

• The FHA requires a small down payment (as low as 3.5 percent of the purchase price).
• The annual premiums for FHA insurance have recently been decreased.
• The FHA was created to make homeownership a possibility for everyone.
• Bankruptcy or foreclosure do not preclude you from obtaining an FHA loan.

Can I pay off my FHA Loan early?

Yes. You have the option of paying off your FHA loan early. Prepayment penalties are not charged on FHA loans, unlike many standard mortgages.

FHA loans, which are government-backed mortgages, are intended for borrowers with low to moderate incomes. Many traditional loans need a higher minimum down payments and credit scores. FHA loan rules state that borrowers cannot be charged any superfluous fees, such as a due-on-sale clause or a prepayment penalty, that could put them in financial trouble.

An FHA loan is easier to qualify for than a conventional loan, which is a loan that is not insured or guaranteed by the government. FHA loans allow for lower credit ratings and, in some situations, lower monthly mortgage insurance payments than conventional loans.

One of the most significant advantages of FHA loans is that the interest rate imposed on the loan is the same regardless of your credit score.