FHA Loan

July 15, 2018

FHA loan to buy a house or refinance.

The FHA program was created as part of the National Housing Act on June 28, 1934. FHA was created to help stimulate the housing market making loans more accessible and more affordable. The FHA program was created as a result of The Great Depression to help anyone including families, the elderly, people on disability and lower-income families be able to buy a home.

After the financial crisis of 2008 all the major banks raised their credit standards for approving FHA loans. Because the banks make the rules for loans they will approve, they may require a minimum credit score of 640 for their loans. These guidelines are the bank's guidelines.

FHA after bankruptcy   FHA after foreclosure   FHA after short sale

Credit score - On January 20, 2010 FHA announced a new policy to address risk. FHA changed the minimum credit score for new borrowers.

• FHA requirements new borrowers will now be required to have a minimum credit score of 580 to qualify for 3.5% down payment
  
• Borrowers with less than a 580 credit score will be required to put down at least 10%

This has allowed the FHA to better balance its risk and continue to provide financing for home buyers.

Debt-to-income ratio - April 1, 2013 FHA requirements include a maximum debt to income ratio. When a borrower applies for an FHA mortgage, they are required to disclose all debts, open lines of credit, and all possible approved sources of regular income. Using this data, the lender and FHA can calculate the borrower's debt-to-income ratio.

• FHA maximum debt to income ratio can be over 55%
• Manual underwriting maximum debt to income ratio is 50%

Charge off accounts  - Collection accounts - Judgments

Mortgage Insurance - On January 9, 2015 the Federal Housing Administration (FHA) announced the reduction of it's annual Mortgage Insurance Premium (MIP) rates.

Effective on or after January 26, 2015 FHA will reduce the premium from 1.35% to .85% a reduction of .5%.

Combined with low interest rates and the reduction of MIP rates means that it is a great time to buy a home or refinance your mortgage.

First Time Home Buyer - FHA Refinance

Closing cost - FHA allows the seller to pay up to 6% of your closing cost.

If you are buying a $100,000.00 house FHA allows the seller to pay up to $6,000.00 for your closing cost. It must be in writing in the sales contract, "Seller will pay up to 6% of buyer's closing cost."

If you do not write it into the sales contract then you will be paying the closing cost. In the state of Florida closing cost for a $100,000.00 house average around $4,300.00 depending on taxes, insurance and who's paying the transfer tax and owner's title insurance.

By allowing the seller to pay for your closing cost you will decrease the amount of money required to buy a home. Buying a $100,000.00 property requires $3,500.00 down payment and if the seller pays up to $6,000.00 for your closing cost you will only need around $4,000.00 to buy a $100,000.00 in Florida.

Are you a first time home buyer? Do you need to get pre-approved for a first time home buyer program in Florida? Apply now!

Apply Now!

Call us 888.958.5382

FHA purchase FHA refinance FHA 203k loan FHA cash out $100 down loan

FHA loan requirements - ‎FHA loan limits - ‎FHA loans - ‎FHA Streamline

www.MORTGAGE-WORLD.com, LLC is a licensed residential mortgage broker and will match you with the lender that will approve your FHA loan down to a 500 credit score.

We look forward to working with you.