Dec 1 2017 Is FHA A Good Option For Mortgage Financing

Dated: 12/01/2017

Views: 34

FHA insured mortgages serve a sector of the market that is not necessarily being met by other loan programs.

Securing an 80% conventional mortgage that doesn’t require mortgage insurance may be the lowest cost of financing but if the buyer doesn’t have 20% down payment, it isn’t really an option.

Securing a 100% VA loan doesn’t require a down payment or mortgage insurance but if the buyer isn’t a veteran with his/her eligibility intact, it isn’t an option either.

There are conventional loan programs with as little as 3% down payment but they not only require mortgage insurance, they also require a credit score of 740 or above which may eliminate some buyers.

For these reasons, FHA is a viable alternative to about 20% of new and existing home sales. The Federal backing of these mortgages makes it easier for first-time and low-income buyers to qualify because the requirements are not as demanding. They’re even more lenient towards buyers who have previously experienced bankruptcy, foreclosure or a short sale.

Finding the right mortgage for the right home is a team effort where both mortgage and real estate professionals work in harmony to get a buyer into their own home. Call us at (817) 683-4717 for a recommendation of a trusted mortgage professional.

General FHA loan requirements include:

  • The loan is for primary residences only but can include two, three or four units.

  • The property must be appraised by an FHA-approved appraiser.

  • The property must be safe, sound and secure, in compliance with minimum property standards as defined by the U.S. Department of Housing and Urban Development.

  • The borrower must be a legal resident of the U.S. and have a valid Social Security number.

  • The minimum credit score of 580 with a down payment of at least 3.5 percent, or a minimum credit score of 500 with a down payment of at least 10 percent.

  • The borrower may not have delinquent federal debt or judgments, or debt associated with past FHA loans.

  • The borrower must have steady employment history.

  • Documentation is required if the down payment was gifted by a family member.

  • The borrower must have a debt-to-income not exceed limits of 31% for front-end and 43% back-end ratio (some exceptions may apply).

Any judgments or collections on the credit report must be resolved or satisfactorily explained.

RENEE PLUMLEE, REALTOR® ABR®
Keller Williams Lake Cities 
www.pickreneehomesforsale.com
pickrenee@kw.com
214-734-5872 cell/text

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