FHA mortgages are government-insured fixed rate loans with a low down payment and a low interest rate.
What does FHA stand for?
FHA stands for Federal Housing Administration.
Who qualifies for an FHA mortgage?
Anyone can qualify for an FHA mortgage. Many consumers believe FHA mortgages are only for first-time homebuyers, but this is not the case. It is not a first-time homebuyer program, however it is a beneficial option for first-time homebuyers. The minimum credit score for an FHA mortgage is 620.
What are the benefits?
FHA mortgages require a lower down payment than other types of mortgages. The minimum down payment for an FHA mortgage is 3.50% of the purchase price of the home. FHA mortgages also allow down payments to be a gift from immediate family members. This can be very helpful for first time homebuyers.
Another benefit of FHA mortgages is that they allow a more flexible debt to income ratio for applicants. This means that applicants have more buying power because they are able to spend more on their new home.
It is important to note that additional fees are incurred with an FHA mortgage. Your mortgage professional will discuss any fees that apply.
What terms are available?
FHA mortgages are available in 30 and 15 year terms.
What documents do I need to apply?
To apply for an FHA mortgage you will need the following documents:
- Last two months of bank statements
- W-2 forms for the previous two years and a recent paycheck stub(s) (covering a 30 day pay period) reflecting year-to-date earnings
- IF divorced, please provide copies of recorded divorce decree/child support order
- If self-employed, borrowers must provide complete tax returns with all appropriate schedules for the previous two years along with year-to-date profit and loss
Interested in learning more about FHA mortgages or wanting to look at other mortgage options? Our mortgage team will help you secure the right rate and term for your individual financial situation. Contact one of our mortgage professionals today at email@example.com or by calling 217-278-7700.