Loan Smart
  • Home
  • Loan Programs
    • Fixed Rate Home Loan
    • Adjustable Rate Mortgage (ARM)
    • FHA Home Loan
    • VA Home Loan
    • Home Loan Refinance
    • Reverse Mortgage
    • Renovation Home Loans
    • USDA Home Loans
    • Jumbo Home Loan
  • Home Loan Quote
  • Search Lenders
  • Ask A Mortgage Pro
    • Frequently Asked Mortgage Questions
  • Home Loan Resources
    • Home Loan Consultation
    • Home Loan Process
    • Home Buyers Guide
    • Mortgage Glossary
    • Mortgage Calculator
  • Mortgage Blog
    • Reverse Mortgages

      When a Reverse Mortgage Is a Good Idea…

      March 23, 2017

      Reverse Mortgages

      All About Reverse Mortgages

      March 23, 2017

  • About
  • Home Loan Quote
  • Directory
  • Ask A Mortgage Pro
    • Frequently Asked Mortgage Questions

Loan Smart

Banner
  • Home
  • Loan Programs
    • Fixed Rate Home Loan
    • Adjustable Rate Mortgage (ARM)
    • FHA Home Loan
    • VA Home Loan
    • Home Loan Refinance
    • Reverse Mortgage
    • Renovation Home Loans
    • USDA Home Loans
    • Jumbo Home Loan
  • Home Loan Quote
  • Search Lenders
  • Ask A Mortgage Pro
    • Frequently Asked Mortgage Questions
  • Home Loan Resources
    • Home Loan Consultation
    • Home Loan Process
    • Home Buyers Guide
    • Mortgage Glossary
    • Mortgage Calculator
  • Mortgage Blog
    • Reverse Mortgages

      When a Reverse Mortgage Is a Good Idea…

      March 23, 2017

      Reverse Mortgages

      All About Reverse Mortgages

      March 23, 2017

FHA Mortgages

What is an FHA mortgage

written by Loan Smart Team Smart Team July 31, 2016
What is an FHA mortgage

What’s an FHA mortgage?

An FHA mortgage is a government-backed home loan with more flexible lending requirements than those for conventional loans. Because of this, interest rates for FHA mortgages may be somewhat higher, and the buyer may need to pay monthly mortgage insurance premiums along with their monthly loan payments. FHA loans are available with fixed rates or as adjustable-rate mortgages.

FHA loans are insured by the Federal Housing Administration (FHA) and may have an easier qualification process due to less stringent down-payment and credit requirements than conventional mortgages. Note: If you’re a current military member or veteran, you may be eligible for a VA home loan with little or no downpayment.

Benefits and Considerations

Lower Down Payments

An FHA mortgage may require a down payment as low as 3.5 percent, although the interest rate may be somewhat higher than with a conventional mortgage.

Lower Credit Thresholds

One of the benefits of the FHA loan program is that home buyers may qualify even without a long credit history or outstanding credit.

Popular for Refinancing

Many borrowers with newly adjusting ARMs look to refinance into fixed-rate FHA loans. Learn more about your refinance options.

Requirements and Qualifications

  • Loan amount – FHA home loans have maximum mortgage limits that vary by state and county.
  • Down Payment – FHA loan guidelines require a minimum down payment of 3.5 percent.
  • Property condition – FHA loans require that the home being purchased must meet certain conditions and be appraised by an FHA-approved appraiser. New FHA loans are available only for homes that will be used as the buyer’s primary residence.

An FHA mortgage may be a good fit if you have less-than-stellar credit or limited cash for a down payment, but other options exist. Compare mortgage options to learn more on your own, or contact a mortgage loan originator to find out which mortgage option is the best fit for you.

Loan payment example: On a $152,625 loan ($150,000 base amount plus $2,625 for prepaid mortgage insurance) with a 3.5% down payment for 360 months at 4.00% interest rate, monthly payments would be $896.06. No customer paid closing costs, APR is 5.489%. This payment example does not include amounts for taxes and insurance premiums. The monthly payment obligation will be greater if taxes and insurance are included and an initial customer deposit may be required if an escrow account for these items is established.

Source: US Bank

0 comment
0
Facebook Twitter Google + Pinterest
Loan Smart Team Smart Team

next post
What is Mortgage Insurance

Categories

  • Adjustable Rate Mortgages (ARMs)
  • FHA Mortgages
  • Home Buying Information
  • Interest Rates
  • Lending News
  • Mortgage Closing
  • Mortgage Insurance
  • Personal Finance
  • Refinance
  • Renovation Loans
  • Rent or Buy
  • Reverse Mortgages
  • USDA Home Loans
  • VA Loans

Popular Posts

  • 1

    What is a USDA Home Loan

    August 26, 2016
  • 2

    IS MORTGAGE INSURANCE REQUIRED

    October 19, 2019
  • 3

    All About Reverse Mortgages

    March 23, 2017
  • 4

    Low Interest Rates Lead to Mortgage Refinances Increase

    June 15, 2019
  • 5

    Can You Buy A Home With No Credit

    March 21, 2017

About Loan Smart

Loan Smart is your fast and simple online learning platform for home lending. Find a realtor or home loan lender in our online directory. Request a personalized home loan consultation by completing our free online mortgage quote form, or ask a home loan question to one of our network or mortgage industry professionals.

What is Loan Smart

Loan Smart is an innovative online network of top mortgage professionals and realtors. The Loan Smart network is one of the largest platforms designed for consumers to interact direct with lenders.

Recent Posts

  • IS MORTGAGE INSURANCE REQUIRED

  • Low Interest Rates Lead to Mortgage Refinances Increase

  • Popular Mortgage Terms and Definitions

Newsletter

Subscribe to the "Get Loan Smart" newsletter for home lending blog posts, tips & more. Happy Home Shopping!

@2019 - Get Loan Smart. All Right Reserved. A Wilstrong Solutions Service