November 9, 2016
Are you thinking about purchasing a home? Or refinancing your current home loan? FHA mortgage loans and refinance loans offer a variety of options.
For new purchases, an FHA mortgage loan allows qualified borrowers to purchase typical suburban homes, but also condo units, town homes, and manufactured homes. Any property that has a permanent foundation or will be affixed to a permanent foundation at closing time may be eligible for an FHA mortgage. (All homes considered for purchase with an FHA loan are subject to an appraisal and must meet basic FHA standards.)
Heading 2
For new purchase loans, borrowers can choose a fixed interest rate mortgage or an adjustable rate loan. Borrowers who choose adjustable rate mortgages will be offered an introductory rate, and overall your FICO scores and credit history will help determine your access to the most competitive interest rates. Those who choose fixed rate mortgages will negotiate that rate with the lender. For all FHA loans, the lender and borrower negotiate the rate and other terms; the FHA itself does not set or regulate interest rates.
FHA home loans require credit checks and income verification as a condition of loan approval, but overall FHA loans are more forgiving in terms of FICO scores and credit history than some conventional mortgages. Lender standards apply and will vary.
If you are thinking of refinancing, FHA loan options include choices for both those with existing FHA loans and those with non-FHA mortgages. You don’t have to have an existing FHA loan to get approved to refinance your mortgage with an FHA loan.
Heading 3
FHA refinance options also include fixed rate mortgage and adjustable rate mortgage loan options. Refinance loans that involve cash back to the borrower will always require a new credit check and appraisal, but certain FHA-to-FHA refinance options don’t have an FHA required appraisal or new credit check. Speak to your lender about this option as lender standards may apply.
Heading 4
FHA refinance loans do not require the borrower to stay with the same financial institution. If you are looking for more competitive terms and find them with a different lender, FHA loan rules permit you to shop around, but you are also free to use your existing lender to refinance.
New purchase and refinance loans alike permit FHA borrowers to apply for additional funds to make approved energy-efficient improvements to a property. Ask your loan officer about the FHA Energy Efficient Mortgage loan option if you are interested in this. Specific FHA loan rules apply and your improvements must be approved by the lender, but the option is an important one for many borrowers.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
Browse by Date: