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Call Toll Free: 1-866-503-7334
FHA Mortgage Loans - Not
just for first time homebuyers
What is an
FHA mortgage loan?
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In 1965 the Department of Housing
and Urban Development (HUD) was formed. Within HUD operates the
Federal Housing Administration (FHA), which has the primary
responsibility for administering the government home loan insurance program. This program
allows a first time home buyer who might otherwise not qualify
for a home loan to obtain one because the risk is removed from
the lender by FHA who insures the loan for the lender.
The most popular FHA home loan program for a first time home
buyer is by far is the 203(b). This is your standard fixed rate
loan for 1-4 family owner occupied houses and only requires a
minimum of 3.5% from the borrower. This loan also permits 100%
of their money needed to close to be a gift from a relative,
non-profit organization, or government agency.
The main advantage to a FHA home loan is that the credit
criteria for a first time borrower are not as strict as
Conventional Loans sold to Fannie Mae (FNMA) or Freddie Mac (FHLMC).
Someone who may have had a few credit problems or no traditional
credit should not have a problem obtaining FHA financing. Also,
FHA home loans are assumable, allowing a person to take over the
mortgage without the additional cost of obtaining a new loan. In
addition, the seller or lender must pay for part of the
"traditional" closing costs (called non-allowable costs) while a
borrower's allowable costs can partially be wrapped into the
loan. The monthly mortgage insurance premium is cheaper for an
FHA loan verses a conventional loan with 3% down. Finally, FHA
loans may may require less income to qualify.
Many people make the mistake and assume that FHA loans are
only available for first time home buyers. This is not true.
FHA loans are available to anyone, whether your first or fifth
home and can be used to purchase a home or
refinance
a home. If refinancing a home, the current loan DOES NOT
have to be an FHA loan.
The greatest disadvantage of FHA home loans is that FHA
limits the loan size that one can borrow. Please see
the link for FHA Loan Limits in your area. Others may try and
convince you that the FHA upfront mortgage insurance premium (MIP) is a disadvantage. However this amount makes just a very
small increase in the borrower's monthly payment and is partially
refundable in certain cases. More...
Feel free to contact us with any questions!
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American Mortgage Finance, Inc.
Toll Free: 1-866-503- 7334
email:
info@americanmortgagefinance.net
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*American Mortgage Finance, Inc. may ask you to provide
information only for reference. We do not sell private
information to outsiders for any other activity.
NMLS ID# 18811
FHA Lender ID# 29356 0000-1
VA
Lender ID:
089902-00-0
Licensed by
the Pennsylvania Dept. of Banking as 21850
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