Did You Know?

FHA loans are one of the best options for young, first-time home buyers who have not had as much time to save for a large down payment or establish a high credit score.

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Build Or Buy?


Build Or Buy?
When it’s time to consider buying a home, the Federal Housing Administration (FHA) offers two popular options. One is the traditional FHA purchase loan many use to buy a house in the suburbs. But not everyone wants to buy an existing property. Some want more control over the design and configuration of the home.

The other FHA construction loan option, the one-time close mortgage, comes in here. This option is for those who want to approve floor plans, have a say in the types of materials used to build the home and choose its features. 

Both loan types require the same low down payment of 3.5% and, depending on your downpayment, loan term, and other variables, require mortgage insurance for either 11 years or the lifetime of the mortgage. 

Is A One-Time Close Construction Loan Right For You?

An FHA construction loan, often called a "one-time close" loan, combines construction financing and a permanent mortgage into a single transaction, approval, and loan closing day. 

The borrower must choose contractors, approve floor plans, and work with the lender and builders to complete the project. 

You should have plans for a temporary living space during the construction phase if needed. In typical cases, you won’t be able to live in your new home until the work is fully completed.

This loan suits anyone looking to build a custom home tailored to their needs and preferences. However, to qualify, you may need more cash reserves, higher FICO scores, and the ability to save up your own downpayment.

Is An FHA Purchase Loan Right For You?

An FHA purchase loan is a mortgage insured by the Federal Housing Administration (FHA). It is designed to help applicants with lower FICO scores and/or those who need a smaller down payment find affordable homes.

Creditwise, many feel FHA loans are more lenient compared to conventional loans. FHA loans allow the maximum financing for applicants with FICO scores of 580 or above, though your lender may have additional standards to meet.

Who is right for an FHA purchase loan? With its escape clause guarantee that you can’t be forced to buy a home that appraises lower than the asking price, those who need an affordable home who need a house, condo, mobile home, or even a fixer-upper should look into an FHA purchase loan.

If you need downpayment assistance, an FHA purchase loan may be the best option.
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FHA Loan Articles

Home Loan Closing Costs

When you buy a home with an FHA mortgage, cash for closing costs and your down payment is required. It would be easy to assume you simply give the lender cash in the specified amount and that’s the end of the story.

One-Time Close Construction Mortgages vs. Two-Close Loans

Did you know there is an FHA loan option that lets you build a house from the ground up? You can use this mortgage to build on land you own or on land you buy as part of the loan. But you will want to address some issues comparing construction loan options.

FHA Loans, Appraisals, and Excess Land

Sometimes when buying a home there may be a question of surplus or excess land. You likely won’t face this issue when buying a condo unit, but for other types of purchases, this may be an important factor in the appraisal process.

FHA Loan Income Rules to Consider Before Applying

Your lender is required to make sure you can realistically afford your mortgage, and that means verifying that your income is stable, reliable, and will continue after your mortgage has closed. What some don’t realize about this process is that there are standards for verifying income.

Can Rental Income Be Used to Qualify for an FHA Mortgage?

FHA loan rules for single family purchase loans include guidelines for the lender to use if the applicant has rental income. Some want to know whether it is possible to qualify for an FHA mortgage using rental income. The real issue is whether the rental income meets FHA loan rules.

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