Fha loans, how do i qualify?
The Federal Housing Administration has been around since 1934 helping young families get into a home by offering a smaller down payment, lower closing costs and credit qualifying that is easier to get a home.
How do you qualify? Qualifying is how the lender looks at your credit and payment history. If you have little or no credit you could qualify but it will be difficult. If you have established some credit but have had some miss payments or your debt to income ratio would not fit into a conventional loan than a FHA loan would be the right fit for your needs. This does not mean that all people who have credit risks are lumped in a FHA bucket, it just gives a person who does not have long credit history or some bumps along the credit history road to get a loan that they could afford comfortably.
Typically, when buying your first home it can be stressful, time consuming and difficult to come up with a down payment. FHA helps new home owners with only requesting a 3.5% down payment. As an example if you were to buy a $200,000 home your down payment would $7000.00 compared to 10% or 20% which would cost a young family $25,000 to $50,000. You can also buy a home that is a fixer upper and lump the costs into one loan as well. This will make it very easy for you to acquire what you need and then roll the costs up into one loan.
The Federal Housing Administration will work with seniors 62 years of age and older by offering a reverse mortgage, if you own your house out right or have a low balance. You could then take money out of your home to help with living expenses.
One of the downsides to having a FHA loan is having to pay the private mortgage insurance (PMI) , it typically costs between 0.45% to 1.35% annually based on the cost of your home. The LTV (Loan to Value) is how the PMI is paid. If your LTV is greater than 95% on a $200,000, which is $190,000, you pay $2565.00 per year for at least the first five years or an additional $213.75 monthly. It's very important, when you can, move to a conventional loan after about five years so you can stop paying on the private mortgage insurance. There is no way around the cost of this insurance and it's used to keep fees lows to all borrowers who are credit risks or cannot afford the 10% or 20% down with a conventional loan. It will be a burden but the lower your Loan To Value the lower the cost of insurance will be.
FHA loans are great products for a young growing family purchasing their first home. As the family and income grows within the first five years you will want to put you and your family into a loan that will better for you long term but in the beginning of your home ownership it's a great place to start, if you qualify.
How do you qualify? Qualifying is how the lender looks at your credit and payment history. If you have little or no credit you could qualify but it will be difficult. If you have established some credit but have had some miss payments or your debt to income ratio would not fit into a conventional loan than a FHA loan would be the right fit for your needs. This does not mean that all people who have credit risks are lumped in a FHA bucket, it just gives a person who does not have long credit history or some bumps along the credit history road to get a loan that they could afford comfortably.
Typically, when buying your first home it can be stressful, time consuming and difficult to come up with a down payment. FHA helps new home owners with only requesting a 3.5% down payment. As an example if you were to buy a $200,000 home your down payment would $7000.00 compared to 10% or 20% which would cost a young family $25,000 to $50,000. You can also buy a home that is a fixer upper and lump the costs into one loan as well. This will make it very easy for you to acquire what you need and then roll the costs up into one loan.
The Federal Housing Administration will work with seniors 62 years of age and older by offering a reverse mortgage, if you own your house out right or have a low balance. You could then take money out of your home to help with living expenses.
One of the downsides to having a FHA loan is having to pay the private mortgage insurance (PMI) , it typically costs between 0.45% to 1.35% annually based on the cost of your home. The LTV (Loan to Value) is how the PMI is paid. If your LTV is greater than 95% on a $200,000, which is $190,000, you pay $2565.00 per year for at least the first five years or an additional $213.75 monthly. It's very important, when you can, move to a conventional loan after about five years so you can stop paying on the private mortgage insurance. There is no way around the cost of this insurance and it's used to keep fees lows to all borrowers who are credit risks or cannot afford the 10% or 20% down with a conventional loan. It will be a burden but the lower your Loan To Value the lower the cost of insurance will be.
FHA loans are great products for a young growing family purchasing their first home. As the family and income grows within the first five years you will want to put you and your family into a loan that will better for you long term but in the beginning of your home ownership it's a great place to start, if you qualify.
