Below is a list of common questions related to FHA mortgages and easy-to-understand answers.
What is the FHA?
FHA stands for the Federal Housing Administration. It was created in 1934 to help Americans purchase homes.
Does the FHA actually lend the money?
The Federal Housing Administration (FHA) does not actually lend any money. It establishes the lending guidelines for banks to follow. When banks underwrite properly to FHA standards, after the loan is funded the FHA will insure the lender in case the borrower defaults.
What makes an FHA-insured mortgage beneficial?
An FHA-insured mortgage is generally easier to qualify for and requires a smaller down-payment, and the interest rates are slightly less or equal to conventional loans.
The loan limit across the country is different. Click here to see limits in your area.
Can I pay an FHA loan off early, without penalty?
Absolutely!
Can I refinance from a conventional loan to an FHA loan?
Yes. Talk with David today to see if refinancing makes sense for you.
Will I have to pay mortgage insurance with an FHA loan?
Yes, FHA mortgages require you to carry mortgage insurance.
Are there any possible downside to an FHA Mortgage?
Homeowners have to pay an upfront mortgage insurance premium. Depending on your credit score, this can range from 1.5% to 2.5% of the loan amount. However, this entire amount can be financed to the loan.
Is an FHA loan always better than a standard conventional loan?
If you are putting more than 10% down, a conventional loan is typically more cost effective.
Can I get a "fixer-upper" home with an FHA mortgage?
Yes; however, you might be required to fix certain problems in the home before you can get the full loan. Speak with us today for details on this.
