FHA Mortgage Loans
The Benefits Of An FHA Mortgage Loans
The Federal Housing Administration (FHA) insures mortgages to allow low to moderate income families to purchase their own home. With government backing, families can buy a home at a lower initial cost. However, there are limitations with this program.
Mortgage Insurance – Section 203(b)
The FHA provides mortgage insurance, not mortgage loans to families. However, this program can reduce the cost of a home loan by thousands of dollars. The program also encourages lenders to finance mortgages for people who might just miss the underwriting requirements. For example, FHA loans require a smaller down payment.
With FHA’s Section 203(b) program, a homebuyer can purchase a new or used one to four family home. However, the buyer has to live in the home.
FHA Benefits
A FHA mortgage allows some borrowers to qualify for the lower interest rates of a conventional loan, rather than using a higher rate sub-prime mortgage. This can save thousands in interest charges.
Required down payments are also smaller. Instead of the typical 10% down, a buyer can put down as little as 3%. The closing costs can also be financed with the mortgage, lowering the initial costs of purchasing a home.
The FHA also limits fees that can be charged to the borrower. For example, the loan origination fee cannot surpass 1% of the mortgage amount.
Drawbacks
FHA loans do have their drawbacks and are not for everyone. For instance, the FHA sets loan limits to ensure the program serves low to moderate income families. You may find with these loan caps that you will need to apply for a conventional or jumbo loan to purchase your home.
You also have to use the house as your primary residence. If you are looking to invest in property or buy a vacation home, then you will need to look at other financing sources.
Applying For FHA Mortgage
FHA insured mortgages are provided through approved financial institution. Fortunately, many of today’s lenders are approved. Just like with any type of loan, you should compare rates of different lending companies. An FHA approved institution doesn’t necessarily mean they offer the lowest rates.
You can easily find rates and terms online by searching individual sites or using a mortgage broker site. By collecting quotes, you can research rates without hurting your credit score.
Guide to Florida FHA Mortgage loans
Guide to Florida FHA Mortgage loans
If your thinking of buying a Florida home, or you’re relocating to Florida from another location, or you may be a long-time Florida homeowner who is looking to either refinance your current mortgage or cash out refinance for home improvements. Regardless of your situation, it’s important that you educate yourself on Florida FHA home loans before shopping for a home and/or your next Florida mortgage. This article explains what you will need to know before seeking a FHA home loan in Florida:
Florida home buyers should know the many advantages of the FHA mortgage loan programs. Florida FHA loans were created to help increase home ownership. For the Florida home buyer the FHA program can simplify the purchase of a home, making financing easier and less expensive than a conventional mortgage loan product. Some highlights of the Florida FHA loan program include:
- Minimal Down Payment and Closing costs.
- Down payment less than 3% of Sales Price Gifts are allowed
- Seller can credit up to 6% of sales price towards closing and prepaid costs.
- 100% Financing available
- No reserves required.
- FHA regulated closing costs.
- Easier Credit Qualifying Guidelines such as:
- No minimum FICO score or credit score requirements.
- FHA will allow a home purchase 1 year after a Bankruptcy.
- FHA will allow a home purchase2 years after a Foreclosure.
Apply for FHA financing in Florida at ( http://www.FHAmortgagePrograms.com)
Florida’s FHA mortgage specialist.
The median price of a home in Florida is $246,000,. And, recently the value of homes in Florida have been appreciating at astronomical rates . Infact well above the national average. As a result, income levels in many parts of Florida are too low to purchase a Florida home with a conventional loan. Although average interest rates for Florida FHA loans are below the national average, Florida has one best levels of home affordability in the entire nation.
In Florida, before a buyer submits an offer on a Florida home, their real estate agent is required to present them with a completed Real Estate Transfer Disclosure Statement. The disclosure statement finished by the seller disclosures all material facts that may affect the value of the home. The document requires the seller to list all of the property that will be included in the purchase of the home including but not limited to the fans, blinds, refrigerator, microwave, stove, alarm system, etc. and rate certain aspects of the conditions of both the included property and of the home itself. This document requires the seller to disclose any potential problems or hazards that may discourage the Florida buyer from putting an offer in on the home.
Florida’s Civil Code Provision of the Real Estate Act regulates the issuance of variable interest rates for the purchase of real estate. Therefore, borrowers who are issued large mortgage amounts are guaranteed a fixed rate FHA mortgage loans. Florida law also prohibits the charging of interest more than one day prior to the recording of the mortgage even if the borrower received the loan prior to that time.
In July of 2002, Florida law enacted a set of anti-predatory lending laws in order to help protect Florida mortgage applicants from predatory lenders. Some of the provisions of this new set of laws include the prohibition of a lender charging points and fees in excess of 8% of the total principal financed amount, the prohibition of a FHA mortgage company issuing a loan to a borrower in an amount that the borrower could not reasonably afford to repay, and the prohibition of the financing of single-premium credit insurance, among others.
If you’re buying a Florida home, you first want to look at the Florida FHA Loan. First-time home buyers qualify for Florida FHA loans with below-market interest rates, and, depending on their eligibility, may also qualify for a loan in order to cover down payment and/or closing costs. Teachers and other professionals who work in an educational capacity may qualify for Florida’s Extra Credit Teacher Home Purchase Program, a down payment assistance loan with forgivable interest.
In addition to Florida FHA mortgage loans offers comparable programs to persons with disabilities or persons who live with and care for persons with disabilities. The state also offers several unconventional loans designed to aid homebuyers with the costs of their monthly mortgage payment. For example, Florida’s Interest Only PLUS loan provides qualified homebuyers with a 100% financing 35-year loan that only requires payments toward the accrued interest on the mortgage for the first five years of the loan — borrowers do not have to pay toward the principal amount borrowed until after the first five years. The individual requirements of each of these Florida FHA mortgage loan vary depending on the Florida county in which you are buying a house. Specific requirements can be obtained through the Florida FHA Housing Finance Agency.
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