Federal Housing Administration (FHA) promotes home ownership, by allowing people to obtain loans and mortgages. It helps because, with only a small down payment a buyer can purchase a home.Who can get an FHA loan?
Almost anyone can get an FHA loan, and there are no income limits. There are limits on how much you can borrow but that is compared by the home prices in the buyer’s area.
What do you need to qualify for FHA? In order to qualify, the buyer will need to have a sensible debt to income ratio. An average ratio would be 29/41. Along with the good debt to income ratio you must have a reasonable credit.
Why are FHA loans so great? FHA loans certainly are not for everyone, but they most definitely benefit some borrowers. FHA loan allows them to buy a home with a three percent down payment, as other loans would have a much higher percentage. They also offer a no prepayment penalty and possible leniency during financial struggles.
How do FHA loans work? FHA pays lenders if a borrower defaults on their loan. So the FHA charges borrowers a fee. If a borrower does not pay on a FHA loan the FHA uses the insurance premium to pay the mortgage.
When is FHA loan better to use than a VA home loan? They differ in amounts the loans are for. FHA maximum loan is $ 725,000. With a VA loan the maximum is usually $417,000. With FHA you pay a Mortgage Insurance Premium (MIP), and you do not pay that fee with the VA. As said previously FHA asks for a three percent down payment, while a VA loan is one hundred percent financing.
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Roberta Kayne, Realtor & Photographer - All Rights Reserved
Specializing in First Time Buyers and Relocation Buyers
Central Ohio - Columbus - Dublin
Certified Residential Specialist (CRS)
Accredited Buyer Representative (ABR)
Short Sale & Foreclosure Resource (SFR)
Residential Relocation Specialist (RRS)
Re/Max Affiliates, 614-537-4564
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