FHA Loan discussed

Since it inception in 1934, the FHA loan programs has been the most popular government back programs in the US. In fact, with a flexible credit score and down payment required, it allows more people to access homeownership. in effect, with a credit score above 580, a down payment of 3.5% is needed. Whereas a score between 500-580 requires a 10% down payment. As one can see this could be an attractive proposition for some buyers. Furthermore, in order to have such flexibility, FHA requires a. mortgage insurance. The Mortgage insurance is an insurance that protects the lender in the event of default from the borrower. Let’s not that Mortgage insurance is not cancellable for FHA loans.

There are more than a dozen programs for FHA loans. Those programs might very slightly in their structures. Below, we will take a look at some examples.

Fixed rate: The payments are stable throughout the duration of the loan and do not vary. The rates is the same and not altered. Each lender sets his own rates.

Adjustable Rate: they tend to have an initial period of 3-5-7 years. During the initial period, the initial rate might be low. However, after the initial period, the rates might increase. Hence, affecting the monthly payment.

FHA 203k : This could be ideal for fixer uppers or property needed some work. the renovation costs can be included into the loan. The amount is based on the after repairs value.

Energy efficient mortgage: This loan provides homeowners with the ability to make energy efficient improvement to their properties.

Refinancing: FHA can be used to refinance up to 96.5 % of the value of a property.

When buying a house, there are closing costs ( the cost to purchase the property). Those cost can be anywhere from 2-5% of the purchase price. The closing costs are the responsibility of the buyer ( the seller also has his/her own closing costs as well). However, we can request seller’s assistance to help with the transaction. the seller’s assistance is deducted from the seller’s proceeds.

One should keep in mind that there are loan limits for FHA loan programs. Make sure to check the loan limits for your specific states.

Contact me for more info. 202-780-5406 / cassey.coul@gmail.com

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