FHA Home Loan

Same as any other type of residential mortgage loan, but one major difference is insured by the federal government, through the Federal Housing Administration (FHA)

There is a monthly mortgage insurance premium (MIP) which varies based on loan amount and regardless of the amortization term or LTV ratio, unlike auto insurance or hazard insurance, where insurance premiums benefit you, but FHA loan mortgage insurance premiums (MIP) is benefit your lender. In any event you default, your lender gets paid.

FHA loans include purchase loans, home construction loans, and streamlined refinance loans insured by the Federal Housing Administration (FHA), which is created by National Housing Act of 1934. This agency is part of the Department of Housing and Urban Development (HUD), it insures all type of loans which meet its minimum standard FHA requirements.

FHA mainly helps people who cannot afford a conventional down payment or does not qualify for Private Mortgage Insurance (PMI). Considering a FHA home loan, you probably have many questions about how the program works for you and how to get approved. An FHA Loan mortgage program isn’t suitable for everyone. But it does benefit some advantages for certain types of borrowers.

Whether you apply for a conventional or an FHA loan, you will apply through a mortgage lender and meet the lender’s minimum guidelines for approval and have to clear the underwriting process.

Conventional

A conventional home loan is originated in the private sector and is not insured by the government.
Mortgage loan that follows the guidelines of government sponsored organization like Fannie Mae or Freddie Mac.
It Contains “Conforming” and “non-Conforming.Conforming loans follow terms and conditions established by Fannie Mae and Freddie Mac.Non-Conforming loans does not meet Fannie and Freddie Mac guidelines, but still considered a conventional.

A Basic FHA Loan Requirements and Qualification

Credit Score

Three scores reporting from Consumer Credit Bureau (Experian, TransUnion and Equifax), the middle number must be used for FHA qualification. Borrowers will need a FICO score of at least 620.

Down Payment

FHA loan allow borrowers for a purchase down payment as little as 3.5 percent. In order to take advantage of the low down payment option, however, borrowers will need a score of 580 or higher, lower than 580 is required to put more money down, at least 10%. The higher FICO scores the most likely to get an eligible for maximum financing.

Purchase Loan

FHA insures loans on a single family and a multi-family homes. It is important that to acquire a professional mortgage consultant analyzes your debt to income ratio, it will let you know what type of home price that you can afford based on your monthly income and expenses when you are seriously consider purchasing a home.

Streamline Refinance

The FHA Streamline Refinance is a unique program for current homeowner waives numerous of the standard verifications require in refinance. According to FHA guidelines, the program does not requires verification of income, employment, credit score and appraisal waived.

Documentation:

There is a lot of paper work from start to end process for FHA Mortgage Loans. Just name a few basic of the documents that you will provide in request for your mortgage approval.

Credit Report
FHA Loan Application
Deposit Verification

Complete sales Contract
Federal Tax Returns
Employment Verification

FHA

Conventional

Credit Score

Down Payment

Purchase Loan

Streamline Refinance

Documentation:

Alabama: Consumer Credit License

Florida: Mortgage Lender License

Georgia: Mortgage Lender License

Louisiana: Residential Mortgage Lending License

New Jersey: Correspondent Residential Mortgage Lender License (Licensed by the N.J. Department of Banking and Insurance)

North Carolina: Mortgage Lender License

Pennsylvania: Mortgage Lender License

South Carolina: Mortgage Broker License

Tennessee: Mortgage License

Virginia: Mortgage Broker License