February 18, 2015
There are plenty of myths about FHA home loans–it’s easy to misunderstand parts of this important loan program if you’re new to it, but knowing some basic facts can help you better understand what an FHA home loan has to offer you compared to conventional mortgage loans.
Fact: FHA loans are NOT just for first-time home buyers.
FHA loans don’t provide any advantage or disadvantage to a loan applicant based on your status as a first-time home buyer or first-time FHA borrower. All qualified borrowers are eligible for the same types of FHA loan programs. Your interest rate and other terms may vary depending on your financial qualifications.
Fact: FHA loans have no income limit.
Some people assume that FHA home loans are intended for financially disadvantaged borrowers, but this is not true. It IS true that FHA loans have more competitive interest rates for qualified borrowers, and there are in general far lower required down payments, but there’s no maximum income limit with these loans. As long as you qualify with good credit scores and your debt to income ratio, you may be approved for an FHA mortgage.
Fact: you can refinance a conventional mortgage into an FHA loan.
Borrowers are free to use FHA home loans to refinance out of a conventional loan and into an FHA mortgage. You can also use FHA refinance loans to refinance out of adjustable rate loans and into fixed rate mortgages. This is a big advantage when a home owner wants to get into a more predictable house payment.
Speak to a loan officer to learn more about these facts and what your options might be under the FHA home loan program You may be surprised at what’s available to you!
Do you have questions about FHA loans? Ask us in the comments section. All comments are reviewed before being posted on the site.
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.
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