| What are Federal Housing Administration (FHA) home loans? |
| FHA mortgages are loans for borrowers who have a steady income, but not the 20% cash on hand for the down payment required by some other loan programs. [Glossary] |
| How do FHA rates compare to Conventional loan rates? |
| FHA rates are the same or lower than Conventional Conforming loans. Ask your loan officer to show you the rate comparison based on your profile. |
| How do I know if I qualify for an FHA loan? |
| Your loan officer will review all of your assets, income, monthy obligations and credit history. Borrowers can qualify for an FHA loan with a down payment for as little as 3.5% and a credit score of 580 or higher. |
| What is MIP? |
| FHA loans have an upfront and annual or periodic Mortgages Insurance Premium (MIP) that is paid monthly. The upfront MIP may be financed into your loan, paid in cash, or covered by a seller credit at closing. The periodic MIP varies depending on the loan amount, term and loan-to-value ratio. You may have heard MIP called PMI, which is the same thing. [Glossary] |
| Is MIP required for the life of the loan? |
| You can eliminate MIP fees if you gain enough equity in your home to refinance into a non-FHA mortgage. The upfront MIP can also be refunded on a prorated basis if you refinance into a new FHA-insured mortgage within 36 months. |
| How do I get an FHA loan? |
| Consult a lender before you start shopping for properties. Before making an offer on a property, ask your loan officer to review the property for FHA eligibility. Also, make sure to let your loan officer and real estate agent know if you’re seeking seller credits before writing the contract on a property. |
Facts About FHA Loans