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| The FHA offers a variety of loan programs with fixed or adjustable interest rates. These home loans are attractive mainly because they require very small down payments, gifts can be used for down payments and closing costs. These loans have qualifications that are more lenient than traditional mortgages and are great for first time home buyers. |
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| Main advantages of FHA loans: |
- Interest Rates are Typically Lower than that of Conventional
- Required down payment is only 3.5% of the purchase price
- The money for down payment can be a gift to the home purchaser from outside sources.
- Seller’s concession is up to 6% of home purchase price.
- Bankruptcy or foreclosure does not necessarily disqualify a borrower from approval if the process has been completed within the required time period.
- Mortgage insurance (MI) upfront and annual mortgage insurance premiums.is required.to secure the loan.
- MI held for the life of the loan :Loans closed after June 3, 2013 must make mortgage insurance payments every year for the life of the loan, no matter how much equity they accrue.
- FHA mortgage can be refinanced up to 97.75% of home’s value.
- Cash–out refinance is available up to 85% of home’s value.
- The UPMIP is currently at 1.75% of the base loan amount. This applies regardless of the amortization term or LTV ratio.
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| FHA has permitted streamline refinances on FHA insured mortgages since the early 1980's. The term "Streamline" refers only to the reduced amount of documentation and underwriting that needs to be performed in order to receive loan approval. To you, that means less effort, less paperwork, less aggravation and no hassle in order to obtain an immediate monthly savings on your mortgage expense. |
