What Are FHA Mortgage Loans?
Are you struggling to get approved for a mortgage loan? If so, then an FHA loan might be exactly what you are looking for! FHA mortgage loans have less restrictive requirements and provide more accessible loan options for individuals. FHA loans are loans that are insured by the Federal Housing Administration. Since they are backed by the government, it makes them more appealing for lenders. These are great loans for first time home buyers, anyone who has a lower credit score and people who do not have a lot of money for a down payment.
What are the benefits of FHA Mortgage Loans?
There are many benefits to using an FHA Mortgage loan to purchase a home. The benefits of FHA loans revolve around making requirements less strict to apply and get qualified for the loan.
Low Down Payment
No more needing to worry about having 20% of loan amount for the down payment! You can pay as little as 3.5% for your down payment with an FHA loan. This cost is much more affordable and puts less constraints on home buyers. Anyone from young couples to families can save more money by putting less money down when purchasing their new dream home.
Lower Credit Score Requirement
Are you tired of hearing your credit is not good enough to be approved for a loan? Well that time is over because you can be approved for an FHA mortgage loan with a credit score as low as 500! While conventional loans usually require a credit score of at least 620, FHA loans are tailored toward individuals who do not have as good of credit. You no longer have to worry about credit challenges in the past preventing you from being a homeowner.
Help With Closing Cost Fees
When you purchase a home, you will have to have money for a down payment and also have money for closing cost fees. FHA mortgage loans allow the seller, builder, or lender to cover up to 6% closing costs, which is higher than the typical percentage for other loans. There are various factors that are associated with closing costs, so if you have more questions about what the cost will be and how it works, contact the Mortgage Genius for help!
No prepayment fees
Most mortgage loan programs do not encourage borrowers to pay back their money at a faster rate than the average monthly rate for the loan. In fact, most loan programs will penalize borrowers for getting ahead on their payments and/or paying off their loan early. With an FHA loan, you do not need to worry about that! FHA loan borrowers will never be penalized for getting ahead on their mortgage payments.
Lower DTI ratio
Your Debt-To-Income (DTI) ratio is a common calculation that lenders use in order to determine if you qualify for a loan. A debt-to-income ratio helps lenders compare how much money you spend paying off debts against how much money you are making. Most loans require individuals to have a DTI of 43%- 50%. If your DTI is over 50%, no need to worry because FHA mortgage loans allow individuals to have up to a 57% DTI and still be approved for a loan!
How do you qualify for FHA Mortgage Loans?
The fastest way to qualify for an FHA mortgage loan is to contact the Mortgage Genius today and he will help you figure out if you can qualify! If you would rather look at the list of qualifications before contacting him, keep reading to see if you will qualify. Here are the qualifications for an FHA loan:
1) Credit score is above 500
2) DTI is lower than 57%
3) Verify consistent income
4) Verify employment history
5) Have at least 3.5% of the loan amount for a down payment
6) Pay for Mortgage Insurance Premium (MIP)
How do you apply for a FHA Loan?
Do you think that an FHA mortgage loan is the loan you were looking for? If so, then you can apply for one today! All you need to do is fill out our Online Mortgage Application and we will let you know if you qualify for an FHA loan. If you would rather apply on the phone, you can call the Mortgage Genius at 602-753-9600.
Still have more questions about FHA Mortgage Loans?
The Mortgage Genius knows everything there is to know about FHA loans. He can answer any other questions that you have. You can also check out the U.S. Department of Housing and Urban Development’s Website to find more information on FHA loans. Don’t wait any longer to become a home owner. Get approved for your FHA loan today!