December 15, 2017
Exploring your FHA loan options for 2018? Whether you are a first-time home buyer or an experienced house hunter, FHA loans have something to offer. You don’t have to be in the market for a new home, either-there are refinance loan options to help you get into a fixed rate FHA mortgage.
New Purchase FHA Home Loans For First Time Borrowers
While there is no FHA-sponsored special deal for first time home buyers or first time borrowers, FHA loans offer excellent options including a lower required minimum down payment-only 3.5% of the adjusted value of the home down as the minimum.
FHA loans can offer more competitive interest rates depending on the lender, the borrower’s financial qualifications, and other factors. You will need to work with your lender to negotiate the interest rate on your loan-the FHA does not set or regulate interest rates.
New Purchase FHA Home Loans For Experienced House Hunters
The terms and requirements of FHA home loans is identical for return borrowers, but FHA home loans are a great choice for those who may already own property but want to buy a new primary residence.
FHA mortgages are intended for owner-occupiers, so if you apply for an FHA home loan you should be interested in living in the property to be purchased with that loan; FHA loan rules do not allow single-family home loans to be used on investment properties. The borrower is required to use the property as her primary residence.
The most important thing experienced home loan applicants need to know is that the FHA loan program does not penalize you for not being a first-time buyer or borrower. You have access to the same FHA home loan (and refinance loan) opportunities as the first-time buyer.
Fixed and Adjustable Rate FHA Loan Options
FHA mortgages are available in fixed rate loans, adjustable rate mortgages, and have 15-year and 30-year terms. These options may vary among participating lenders, so be sure to ask about the specific type of loan and term of loan you seek.
Some types of FHA loans may not be possible with an adjustable rate; some lenders only offer FHA One-Time Close mortgages as fixed-rate loans, for example. Other types of FHA loans may feature different requirements or features depending on whether you choose a fixed rate mortgage or an adjustable rate loan.
FHA Refinance Loan Options For FHA and Non-FHA Mortgages
FHA loans can be refinanced using FHA Streamline Refinancing (which has no FHA-required credit check or appraisal, though the lender is free to require one or both of them) or with cash-out refinancing. Non-FHA loans can also be refinanced as either cash-out or no cash-out refinance options.
FHA refinancing offers the option for a borrower in an adjustable rate loan to refinance into a fixed rate loan, but the option to refinance into another adjustable rate mortgage may also be possible. Eligibility depends on the borrower’s financial qualifications and lender standards.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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