FHA Loans are a great way to purchase a home, especially if you don't qualify for a VA loan, or if the property isn't within the USDA location guidelines. FHA purchase loans offer one of the lowest down payment options with the exception of the two above mentioned mortgage programs. Oftentimes, you can purchase a home through FHA with only 3.5% down.
The Benefits of an FHA Loan
FHA loans are one of the easier mortgage programs to qualify for, with a minimum credit score usually around 640. FHA loans are also available to those who have been through a bankruptcy or foreclosure in the past, if the borrower can prove perfect credit for a few years after the incidents. One of the most obvious benefits of an FHA mortgage is the down payment, which usually only requires 3.5%, and this can be a gift from a family member.
The Disadvantages of an FHA Loan
FHA Loans are great for first time home buyers, those with lower credit scores and those needing a low down payment, but there are still some downsides to obtaining an FHA loan. Should you decide to purchase a home with FHA and make a down payment under 20%, you will be required to obtain a premium mortgage insurance (aka PMI). This will be added to your monthly payments and make them a little higher, while making your cost over the length of the loan higher. Another downside to FHA loans is that you will be required to pay closing costs of around 2.25%, though it can sometimes be added into your loan or gifted to you. You must also pay all title fees and you must prove a solid three year employment history.
Whether you have a mortgage insured by the FHA or not, you can refinance your home loan with an FHA loan. Whether it's to take advantage of a lower rate or to get cash out of the equity in your home, if you qualify for an FHA loan and do not owe more on your home than the appraisal value, you may refinance your current mortgage into one. Most often those refinancing their homes under the FHA are doing so to get a better rate and lower payments.
This refinance option allows you to take cash out of the equity in your home.
This refinance option is only for those that currently have an FHA loan. It allows borrowers to refinance their home to a lower rate and payment without the need for much of the traditional paperword, such as credit, employment history or an appraisal. It is meant to allow borrowers with a good payment history to reduce their monthly payments only.
This refinance option allows those who need to make major repairs or upgrades on their home to improve the value of the property to refinance the cost of the improvements. You must have equity in your home to do this kind of refinance, and you must prove that the repairs are necessary or that improvements will add value to the home.
CTC Mortgage Company offers FHA loans in Flordia, and is conveniently located in West Palm Beach. We would be happy to be your lender. Get a quote to get our best Florida mortgage rate offer for your FHA purchase or refinance. Simply fill out the form above and one of our qualified team members will contact you as soon as possible, and remember - applying is always free with CTC Mortgage Company!