December 10, 2018
An FHA mortgage is not limited to those who are house hunting for the first time. FHA mortgages (and refinance loans) are open to all who financially qualify with FICO scores and other financial considerations. FHA mortgages are not restricted to first-time home buyers.
FHA Loans: Backed By The Federal Government
There are several government home loan programs; VA home loans, USDA mortgages for rural areas, plus FHA mortgages. FHA loans are government-backed to help borrowers buy affordable homes with a lower down payment requirement than conventional mortgages.
Search the Internet and you’ll find (best-execution) mortgage loan interest rates all over the internet for FHA, VA, and conventional loans. In general government backed loans have a lower best execution rate and while interest rates fluctuate daily, FHA mortgages traditionally offer lower rates than the best execution conventional equivalent. “Best execution” refers to interest rates generated for the loan that assume ideal conditions including a well-qualified loan applicant.
FHA Loan Interest Rates and Down Payment Amounts Are Affected By Your Credit Scores And History
The down payment and interest rate numbers are things you will negotiate with the lender and your credit history and FICO scores will be an important part of that discussion.
Borrowers who may be worried about FICO scores should know that it’s recommended to work on your credit before applying for the loan. Don’t apply without seriously examining your credit reports.
Use FHA Loans To Buy, Repair, Or Build A Home
Did you know you have use an FHA mortgage to have a brand new home built for you using plans you approve thanks to the FHA One-Time Close construction loan? There is also an option to buy a fixer-upper using an FHA Rehabilitation Mortgage to bring the home up to code and FHA minimum standards.
FHA borrowers may refinance an existing mortgage and get money to do approved renovations using a refi loan version of the FHA Rehabilitation Mortgage, also known as an FHA 203(k).
FHA Mortgages Allow Seller-Paid Closing Costs
Your seller is not allowed contribute funds toward your FHA mortgage loan down payment, but the seller may to contribute up to six percent of the asking price of the house for sale in seller-paid closing costs.
FHA Home Loans: For Properties Up To Four Units
Borrowers may purchase properties with as many as four living units if the lender consents to the FHA loan; occupancy is among the requirements for these loans. You won’t be allowed to purchase a home with an FHA Single-Family mortgage loan that you do not intend to personally occupy.
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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