Looking for a FHA Loan?
California Mortgage Advisors, Inc. is an approved HUD lender and we specialize in FHA loans. If you are looking to buy your next home or refinance an existing home, let a CMA Mortgage Advisor guide you through the process. Call us today for your FREE consultation at (800) 927-6560 to speak with one of our Mortgage Advisors or you can contact us here online.
What is FHA?
FHA stands for the Federal Housing Administration and it provides mortgage insurance on loans made by FHA approved lenders. FHA is government agency within HUD or the US Department of Housing and Urban Development. HUD oversees FHA who is the largest insurer of mortgages in the world. FHA insurance provides lenders with protection in the event of losses due to a homeowner defaulting on their mortgage. In order for a lender to obtain insurance, the lender must underwrite the file according the FHA guidelines. FHA was created back in 1934 to help the struggling housing industry. Today, FHA insures single family homes, multifamily homes, manufactured homes and even hospitals.
What is an FHA Loan?
A FHA loan is basically a mortgage that is insured by the Federal Housing Administration. FHA loans help homebuyers who have less than 20% to put down and by having more flexible qualification standards than conventional loans. The borrower pays for the insurance which is added to their monthly mortgage payment.
These FHA home loans have been regarded as a way for more Americans to become homeowners. Of course, there are a number of FHA loan requirements that must be met in order for borrowers to be eligible for such insured loans.
FHA—Not Your Traditional Lender:
Rather than acting as a bank or traditional home lender, the FHA simply insures loans made by private lenders. As a home owner looking to find out more about FHA loan requirements, you should ask each potential home lender if they are FHA approved by the US Department of Housing and Urban Development to originate FHA loans. Each lender will set their own rates and terms. This is why comparison shopping is really important here…and it’s also why CMA can really help you to find the loan that is perfect for your situation.
Down Payment Depends On Credit:
One of the more interesting features of the FHA loan requirements is that your down payment will depend upon your credit rating. With a credit score of 580 or higher, you will qualify for a down payment as low as 3.5 percent, as long as you meet the other guidelines for FHA home loans.
Should you have credit scores less than 580, the corresponding down payment required for an FHA loan will increase. For example, those with credit scores between 500 and 579 will need to make down payments of at least 10 percent. Scores under 500 will not generally be eligible for FHA home loans, although there are exceptions. Give us a call today to discuss nontraditional credit history programs, at (800) 927-6560.
FHA Loans & Mortgage Insurance:
Another one of the FHA loan requirements is an up-front payment of a mortgage insurance premium. In most cases, this mortgage insurance premium is added to (and financed through) the existing loan or mortgage. Then, there will be ongoing annual mortgage insurance premiums (MIP). Exactly how much this annual MIP will cost depends primarily on the loan to value (LTV) ratio.
As your FHA loan experts, CMA can help guide you through this process. We are familiar with all FHA loan requirements and will help you find the best options, terms, and down payment solutions. Call us today for your FREE consultation at (800) 927-6560 or click here to apply online.