FHA Loans

FHA loans are mortgages that are insured by the Federal Housing Administration (FHA), which is a part of the U.S. Department of Housing and Urban Development (HUD). These loans are designed to make homeownership more accessible to individuals and families with lower credit scores or limited down payment funds. FHA loans are popular among first-time homebuyers and those who may not qualify for conventional mortgages due to less-than-ideal credit or financial circumstances.

While FHA loans provide many benefits, borrowers should also be aware of certain drawbacks, such as the requirement to pay mortgage insurance premiums. Borrowers are required to pay an upfront mortgage insurance premium (MIP) at the time of closing, as well as an annual MIP that is added to their monthly mortgage payments.

It's important for prospective homebuyers to consult with mortgage lenders and understand the specific terms, conditions, and requirements associated with FHA loans before applying.

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Frequently Asked Questions

Mortgages are typically offered by financial institutions, such as banks and credit unions. Mortgages can also be obtained from other sources, including private lenders and government agencies.Mortgage rates vary depending on the borrower’s credit history, income level, loan-to-value ratio, type of property being purchased and other factors.

When should I refinance?

There are a lot of reasons to get a new loan. We only look at the cost of getting a lower interest rate. We don't look at how much you'll save on your payments, which can change the results because you're frequently borrowing less money. Then, we figure out how long it might take to get those costs back. In many cases, you, the borrower, won't have to pay any or very little of the costs. Even a slight change in rate can save you money. We also look at the remaining time on your mortgage. How much money you could save, and what you plan to do with the money you save from lower rates.

What are the points?

The no points, or based on paying 1 point, are references to a percentage of the total amount that can be borrowed. Since one point is equal to one percent of the loan, 1 point on a $100,000 loan would amount to $1,000. 1 point on a loan of 1.5% would be equal to $1,500.

Should I pay points to lower my interest rate?

Paying discount points to cut loan rates can be effective. Even if you anticipate staying in the property for a long time, the points may not be worth paying unless they provide a cost-effective return depending on the duration it takes to recover the costs. Points can often cut payments or increase borrower power.