Which FHA Loan Is Right for Me?
February 26, 2021
Many borrowers go with the route of an FHA loan. This is because of the numerous ways the FHA has designed their mortgages with first-time homebuyers in mind. FHA loans have a minimum credit score stipulation of 580 with a low- down payment requirement of 3.5%, making it easier for my buyers to qualify.
Another reason many Americans go with FHA loans is that there are a number of mortgage programs that can fit different needs. Here are few of the most popular FHA loan programs:
FHA Fixed-Rate Loan
The fixed rate FHA Home Loan is a popular mortgage choice. With this type, the interest rate remains the same through the term of the loan. The consistent interest rate means that monthly payments remain the same. This is a good option for homebuyers who want to rely on fixed payments to help them set long-term budgets.
FHA ARMs
An Adjustable- rate mortgage (or ARM) has an interest rate that changes over the term of the loan. After an introductory period with a fixed, low interest rate, the rate changes annually, increasing or decreasing, depending on the market indices approved by the FHA. An adjustable- rate loan may work for borrowers who intend move out of the home within a few years. That way they can capitalize on the initial low interest rate and sell before the rates rise.
FHA One-Time Close Loan
The FHA One-Time Close Loan is a construction-to-permanent loan that finances a lot purchase, construction, and permanent loan of a new home as part of one, single mortgage. Borrowers need to qualify just once and pay a single set of closing costs whereas before, they were required to go through the closing process twice, once for the construction loan, then again for the permanent mortgage. The FHA One-Time Close Loan is a great option for those looking to build their home from scratch!
FHA EEMs
The FHA's Energy Efficient Mortgage (EEM) is a special loan program that finances various energy-efficient home improvements as part of a home loan. Along with helping borrowers pay for upgrades on their home, the FHA’s EEM program helps them save money on household utility bills by allowing them to install energy saving appliances in their home. The EEM program is a great way for FHA borrowers to upgrade their home, and can also be used as part of a refinance.
FHA Condominium Loans
In addition to buying single family homes, the FHA finances the purchase of condominiums with its Section 234(c) loan. These loans come with a 30-year term and borrowers can buy residential condos that have at least two units and are located in an FHA-approved condominium projects.
With all the options that the FHA offers, there is bound to be a program that fits your mortgage needs.
------------------------------
RELATED VIDEOS:
Home Equity Can Secure Your Second Mortgage
Consider the Advantages of Discount Points
FHA Limits are Calculated and Updated Annually
FHA Loan Articles
January 22, 2025Consider this scenario: you've been in your home for five years or more and you've likely built up a significant amount of equity, and now you might be wondering how to put that equity to work for you. Whether you're dreaming of a major renovation, need to consolidate debt, or want to help a child with college tuition, you have options. Two choices are an FHA cash-out refinance and a home equity line of credit (HELOC).
January 20, 2025The FHA Streamline Refinance offers a refinance option for those who don't want to cash in on their property's equity but instead want a lower payment or interest rate or who need to get out of an adjustable-rate mortgage. This streamlined program, designed specifically for those already in an FHA-insured mortgage, simplifies the refinancing process with fewer requirements and faster approval times depending on the transaction.
January 16, 2025Want to buy a home and thinking about getting an FHA loan? FHA loans are a great way to make homeownership happen, especially if you're a first-time buyer or don't have perfect credit. But you might wonder, "Can I get more than one FHA loan?"
The short answer is, it's tricky. The FHA itself doesn't say no automatically to having more than one loan. But there's a caveat. FHA loans are about helping you buy a place to live in – your main home base. Because of this, and a few other things, getting multiple FHA loans isn't easy.
January 15, 2025Buying a condo with an FHA loan is an option some don’t consider initially, but it’s worth adding to your list of potential property types. FHA loans for condo units traditionally require condo projects to be on or added to the FHA-approved list. Still, changes in policy over the years allow borrowers to apply for FHA loans on condo units in projects not on the list on a case-by-case basis.
December 30, 2024When applying for an FHA loan, lenders will consider more than just your credit scores and history. They also look at other factors affecting your risk profile and the interest rate they offer you.
One factor is occupancy type. For FHA loans, this is straightforward because these loans require owner occupancy. Investment properties aren't eligible. While conventional loans may have different rates for primary residences, second homes, and investment properties, this isn't a concern with FHA loans.
