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.
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FHA Loan Articles
July 30, 2021The FHA Streamline Refinance allows mortgage holders to refinance their home loan without going through the process of second appraisal. Since this is a step that was completed with the first FHA mortgage, the FHA waives it for the refinance
July 14, 2021Making the decision to buy a house is a big one, followed by the choice of which house to buy. The next biggest decision you make is going to be the type of home loan you need to go through with the purchase. One option for financing your home is an FHA loan.
June 25, 2021Most first-time homebuyers decide on purchasing a home at least a year in advance, sometimes even a couple of years ahead of time. The earlier you make a decision to buy a home, the more time you have to save up for your down payment.
June 8, 2021While an FHA home loan is a good option for first-time homebuyers who don’t have enough money saved for a large down payment, it’s important to understand the ins and outs of the FHA guidelines, and what it takes to get approved as a borrower.
May 24, 2021With historically low interest rates, the mortgage industry has seen a sharp uptick in refinances. Taking advantage of the current market might be in your best interest and could lower your monthly payment significantly. Don’t forget that refinancing a mortgage comes with closing costs.
