WHAT IS AN FHA LOAN?
FHA loans are a type of mortgage that can be obtained by individuals looking to purchase a home. These loans are backed by the Federal Housing Administration, and they are designed to help individuals with low credit scores or a limited down payment to become homeowners. FHA loans offer several benefits, such as low-down payment requirements, flexible credit score requirements, and competitive interest rates. Borrowers can also qualify for larger loan amounts compared to conventional loans. Additionally, FHA loans allow for refinancing and renovation of existing homes. However, borrowers are required to pay mortgage insurance premiums to protect the lender in case of default. Overall, FHA loans can be a great option for individuals who may not qualify for conventional loans and are looking to become homeowners.
TYPES OF FHA LOANS
FIXED RATE LOANS
With a consistent interest rate, borrowers can confidently budget for their monthly payments. This mortgage option is ideal for individuals seeking stability and peace of mind.
ADJUSTABLE RATE MORTAGE
Provides borrowers with an initially lower interest rate that remains fixed for the first five years of the loan term. After this initial period, the interest rate adjusts annually, potentially impacting the monthly payment. This mortgage option is suitable for individuals who anticipate relocating or refinancing within the first five years.
FHA 203(K) LOAN
This loan is designed for borrowers who want to buy a fixer-upper or make repairs to their current home. It allows borrowers to include the cost of repairs or renovations in the mortgage.
STREAMLINED 203(K) LOAN
It is designed for borrowers who want to make minor repairs or renovations to their home. The loan can be used for repairs that cost up to $35,000.
FHA MANUFACTURED HOME LOAN
Provides financing options for individuals looking to purchase or refinance manufactured homes, including those with lower down payment requirements and more flexible credit criteria.
