First Time Home Buyer
How FHA Loan Works
This loan is a great option for people whose credit scores are 580 and higher, and who have a 3.5% down payment.
- Needs an Agent for qualification and income should be atleast 100% AMI
- 620+ credit score
- 3% down payment
- Income cannot exceed 100% of area median income
- Homebuyer education required
What You’ll Need To Qualify For An FHA Loan
- A debt-to-income ratio (DTI) of no more than 50% and a steady employment history. Estimate your DTI by adding your monthly debt payments (such as credit card and car payments) and dividing the total by your monthly income before taxes.
- Money to cover the upfront mortgage insurance premium (UFMIP). The amount is usually equal to 1.75% of your loan amount.
- Money to cover closing costs, which could be anywhere from 2% – 6% of the purchase price.
FHA Loan Benefits
- Credit score requirements are lower compared to other loans.
- You could still qualify for an FHA loan if you’ve had a bankruptcy or other financial issues in the past.
- They’re available with fixed or adjustable rates and for 30- or 15-year terms.
- They have low down payment requirements. You can put down as little as 3.5%.
Refinancing with an FHA loan has some great benefits, too:
- Closing costs can be rolled into your loan.
- If you’ve already got an FHA loan, you can refinance with an FHA Streamline. Less documentation is required for this option, and you may not need an appraisal. The FHA Streamline is a good option if you’re not looking to take cash out.