FHA loans are an attractive option, especially for first-time homeowners because it is insured by the Federal Housing Administration (FHA). Primarily, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments.Typically the borrower can be approved with 3.5% down vs 20% that is required on other loan programs. If you are looking to purchase your first home or refinance your current mortgage at a lower rate Dan O'Brien | Emerald Mortgage Partners can help. We do FHA loans in Lake Mary, Longwood and Sanford as well as the whole state of Florida. Contact us today at (407) 392-1904.
What are FHA loans?
An FHA loan was created to protect lenders in the even a borrower defaults on their mortgage. FHA loans are insured by the federal government which allows lenders to offer these loans with competitive interest rates and flexible qualifications. In most cases, mortgage borrowers can be approved with a down payment of 3.5% and a credit score as low as a 620.
FHA Loan Advantages
FHA mortgages have many benefits and can be used for financing special renovation projects, new home purchases, reverse mortgages and refinancing an existing mortgage. For those consumers looking to refinance there are streamline and cash out options. Streamline refinance options can lower your monthly payment and interest rate while cash out refinances can be used for home repairs. One of the great options of FHA loans is family members are allowed to gift the down payment. Another benefit of FHA loans is a higher debt to income ratio is allowed as well as a lower down payment compared to other loans. FHA loans also can be approved with a prior bankruptcy or foreclosure.
Requirements For FHA Loans
FHA loans are insured by the federal government and have several requirements that borrowers must meet to become eligible. One of the requirements is a minimum credit score of 620 although a score of 580 may qualify with certain compensating factors. A down payment of 3.5% is required and maybe higher with a lower credit score or higher income to debt ratio. A debt to income ratio of 43% is required to qualify for an FHA loan however it may be higher with a better credit score or higher down payment.
Mortgage Insurance Premiums (MIPs)
FHA requires all loan borrower to pay mortgage insurance premiums, MIP’s. The first mortgage insurance premium is the monthly which is calculated by the loan amount and length of mortgage. The second is an up front premium of 1.75% which is generally financed into the loan. For more information about mortgage insurance premiums contact Dan O'Brien | Emerald Mortgage Partners.
FHA Loan Limits
Seminole County
Single Duplex Tri-plex Four-plex
$277,150 $354,800 $428,850 $532,950
Get Prequalified Today!
Work with an FHA loan specialist at Dan O'Brien | Emerald Mortgage Partners. We specialize in mortgage loans for first time home buyers and those looking to refinance. If you are looking to purchase a home in Lake Mary, Longwood or Sanford as well as the whole state of Florida contact Dan O'Brien | Emerald Mortgage Partners today at (407) 392-1904.
