Are you thinking of applying for an FHA loan?
Contact the mortgage brokers at Elite Mortgage Source for some expert advice and suggestions!
FHA loans are a Federal Housing Administration loan that’s insured by the FHA and offered by an FHA-approved lender. They are particularly targeted towards people with moderate to low income. The minimum credit score requirements and down payment are also less than most other conventional loans.
You can even get up to 96.5 percent of the property’s value and simply need to submit a down payment equal to 3.5 percent. The minimum credit score needed for this is still 580. Nevertheless, if your credit score lies between 500 and 579, you can still secure an FHA loan. However, in such a case, you will have to make a 10 percent down payment.
FHA loans are often used by individuals buying a home for the first time due to the many benefits it offers.
With these loans, it’s necessary to understand that you won’t be getting a loan directly from the US government or the FHA. Rather, you will be getting it from a lender approved by the FHA, such as a bank or some other financial institution. Since the FHA provides a loan guarantee, it’s sometimes known as an FHA-insured loan. The lending institution or bank will assess your eligibility and qualifications for a loan.
Moreover, you will also have to make premium payments to the FHA and get mortgage insurance. This is less risky for the lender as the FHA will pay a claim to the lender in case you default on the loan.
FHA Loan Types
The FHA provides the following loans programs that you can avail –
- Traditional Mortgage. This loan is to finance a primary home.
- Home Equity Conversion Mortgage. This is a sort of reverse mortgage program where people over the age of 62 can turn the equity into cash and even retail the property title. There’s an option to withdraw funds as fixed monthly income, a line of credit, or even a combination of the two.
- FHA 203(k) Improvement Loan. This loan factors in the cost of restorations and repairs within your house so that your home become more energy-efficient and benefit from lower energy bills.
- FHA Energy-Efficient Mortgage. This loan is exclusively for upgrades within your property that would considerably lower your energy costs. These improvements can be the installation of solar or wind energy systems or new insulation.
- Section 245(a) Loan. If you think your income will rise in the future, you should avail this loan. It begins with lower monthly payments and slowly increases with time. Thus it’s known as the Graduated Program Mortgage.
Discuss FHA Home Loan Mortgage Plans
Our mortgage brokers at Elite Mortgage Source specialize in home loan mortgage plans. Get in touch with our team to learn more about these loans and find out if you are eligible for an FHA home loan.
