FHA loans are mortgages that are insured by the Federal Housing Administration. What this means is the federal government basically guarantees the loan to lenders and banks even if the home owner defaults and cannot pay. Mortgage companies like this government guarantee since it protects them and limits losses. FHA loans have become very popular with first-time homebuyers because they require a lower down payment than conventional mortgages – only 3.5% of the purchase price. In addition, qualifying for an FHA loan is also often easier than qualifying for a conventional mortgage.
With less restrictive requirements, these loans are a good option for home buyers and presents a great home financing opportunity for first time buyers in Florida that do not have VA eligibility. FHA loans still only require 3.5% for a down payment, which is within reach for most first time home owners. Also the FHA loan amount limits are pretty generous and offer good flexibility and purchasing power. Please see the latest Florida FHA loan limits here.
Home buyers will need credit scores above 600 to obtain maximum 96.5% financing. Even home buyers that have lower credit scores (down to 580) may possibly have FHA financing options with larger down payments of 5-10%. First time buyers in Florida and Georgia have limited options when it comes to reduced down payment mortgage, FHA is a great choice for the new home buyers just starting out. The minimum down can even come as a gift from the buyers family, etc. Buyers looking to purchase in more rural locations are also encouraged to research the USDA mortgage here.
Let’s look at some benefits of the FHA loan:
- The FHA gives you the ability to put as little as 3.5% down.
- Lower credit score down to 600 allowed. The FHA understands all buyers may not have perfect credit.
- Possibility to refinance up to 97.75% of your home’s value later if needed.
- You can prepay your mortgage without penalties.
- One time funding fee that is added into home buyers loan.
- Safe secure fixed rate terms up to 30 years
- Seller of the home is allowed to pay up to 6 percent of the buyers closing costs.
- Monthly mortgage insurance costs ( FHA MIP) added each month, please see the chart below for details on the new lower premiums.
|FHA NEW MONTLY MIP for 2015 – 2016
Term >15 Years
|Base Loan Amount||LTV||Previous MIP||New 2015 – 2016 FHA MIP|
|≤ $625,500||≤ 95.00%||130 bps||80 bps|
|≤ $625,500||> 95.00%||135 bps||85 bps|
|> $625,500||≤ 95.00%||150 bps||100 bps|
|> $625,500||> 95.00%||155 bps||105 bps|
|Term ≤ 15 Years|
|≤ $625,500||≤ 90.00%||45 bps||45 bps|
|≤ $625,500||> 90.00%||70 bps||70 bps|
|> $625,500||≤ 90.00%||70 bps||70 bps|
|> $625,500||> 90.00%||95 bps||95 bps|
Serving all of Florida and Georgia: Ocala Fl, Gainesville, Jacksonville, Tampa, Miami, Orlando, Valdosta, Tifton, Thomasville, Macon, Atlanta GA, Albany, Columbus, Savannah.
Home buyers that are interested in learning about the FHA Loan 3.5 percent down should contact FHA Mortgage Source at ph: 904-302-6060 or visit www.FhaMortgageSource.com