An FHA loan is a great way to purchase a home. FHA loans are available for low and middle income borrowers. They can help borrowers with low down payments and poor credit history as well. An FHA loan will let you borrow up to 96.5% of the value of the home. FHA Loans Fort Lauderdale provides FHA loans to customers in Miami and Fort Lauderdale FL. Our staff has years of experience and will help you get the loan that meets your needs and budget. You’ll be able to move into your dream home in no time. Feel free to email or call our customer service team today if you are interested in our FHA loans and mortgages.
What is an FHA Loan?
FHA loans are loans that have been insured by the Federal Housing Administration (FHA). The loans are provided through FHA-approved lenders to low and middle income borrowers. An FHA loan normally will have a low down payment and can help customers with poor credit scores. A borrower can borrow up to 96.5% of the value of the home. If your credit score is lower than 580 you will need a 10% down payment for the loan. You need to provide mortgage insurance for the loan as well. Our team can help you understand the requirements and requisites for an FHA loan.
FHA Loan Requirements
FHA loans have a set of requirements that might be different than a traditional mortgage. You will need a minimum credit score of 500 to apply for the loan. Your down payment will be based on your credit score and could be 3.5% for scores higher than 580, 10% for scores lower than 580. You will be required to acquire mortgage insurance. Upfront cost is 1.75% of the loan plus annual cost of 0.45% to 1.05%. Insurance is required for the life of the loan. A lender will look at work history and payment history during the application process as well.
Types of FHA Loans
We offer five types of FHA loans. Traditional mortgages are used to purchase a residence. Home equity conversion mortgages are reverse mortgages that let a client exchange home equity for cash. 203(k) mortgages and energy efficient mortgage programs are used to install energy-efficient home improvements. Section 2459(a) is a loan with lower initial monthly payment that gradually increases.
FHA vs Conventional Loans
FHA loans provide some benefits compared to traditional loans. You can get an FHA loan with a much lower credit score. You can get approved with a score as low as 500 for an FHA loan. Down payment of an FHA loan is between 3.5% and 10%, while a conventional loan could ask for a 20% down payment. You will be required to pay mortgage insurance on all FHA loans. 100% of the down payment of an FHA loan can be classified as a gift while only 20% can be a gift in a convention loan. There are also down payment assistance programs for FHA loans.