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The FHA loans are often available in fifteen and thirty-year terms with fixed interest rates. The agency offers flexible underwriting standards, which allow borrowers with no pristine credit, high income, or cash savings to become homeowners.
This coverage shields the lender from a loss should the borrower default on loan. However, it comes with a catch: the homeowner must pay FHA mortgage insurance. For all FHA loans, the borrower must pay two mortgage insurance premiums:
After 11 years of continuous payment of FHA mortgage premiums, most borrowers can have their premiums canceled. This is based on the assumption that they have financed 90 percent and made a 10 percent down payment. However, FHA loans with an LTV bigger than 90 percent must carry the insurance to the full term.
Homeowners who wish to take FHA loans must meet the following guidelines:
Borrowers of FHA loans must identify reliable FHA-certified lenders. Different lenders offer different rates, costs, and underwriting standards. Borrowers can get the loans through major banks, credit unions, community banks, or independent mortgage lenders.
To apply for an FHA loan, a borrower needs the following key steps:
Finally, yet importantly, borrowers need to compare their offers. They can do this by getting preapproved with several lenders to compare different rates and terms. This ensures that they get the best deal. At Blake B Mortgage, we’ve been helping our customers get the home of their dreams for many years. Get in touch with us today to learn more.