What is a FHA Loan?
FHA loans are an attractive option, especially for first-time homeowners because it is insured by the Federal Housing Administration (FHA). Primarily, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments. Typically the borrower can be approved with 3.5% down vs 20% that is required on other loan programs. Huntington Mortgage is a leading provider of FHA Loans in Pasadena, Glendale, Burbank, Granada Hills as well as the whole state of California. For more information on FHA Loans and how to get pre-qualified contact Huntington Mortgage today at (833)403-8230!
Comparatively an FHA loan is one of the easiest types of mortgage loans to qualify for because it requires a low down payment and you can have less-than-perfect credit.
Borrowers who cannot afford a 20 percent down payment, have a lower credit score, or can’t get approved for private mortgage insurance should look into whether an FHA loan is the best option for their personal situation.
FHA Loan Requirements
You knew there had to be a catch, right: Because an FHA loan does not have the strict standards of a conventional loan, it requires two kinds of mortgage insurance premiums: one is paid in full upfront -– or, it can be financed into the mortgage –- and the other is a monthly payment. Also, FHA loans require that the house meet certain conditions and must be appraised by an FHA-approved appraiser.
Upfront mortgage insurance premium (UFMIP) — appropriately named, this is a one-time upfront monthly premium payment, which means borrowers will pay a premium of 1.75% of the home loan, regardless of their credit score. Example: $300,000 loan x 1.75% = $5,250. This sum can be paid upfront at closing as part of the settlement charges or can be rolled into the mortgage.
Annual MIP (charged monthly) — called an annual premium, this is actually a monthly charge that will be figured into your mortgage payment. The amount of the mortgage insurance premium is a percentage of the loan amount, based on the borrower’s loan-to-value (LTV) ratio, loan size, and length of loan
Work with a Qualified FHA Mortgage Lender
If you are seeking a low down payment mortgage or are looking to refinance go no further. Our professionals will work with you one-on-one to find the best mortgage program to fit your specific needs. Huntington Mortgage is a leading provider of FHA Loans in Pasadena, Glendale, Burbank, Granada Hills as well as the whole state of California. For more information on FHA Loans and how to get pre-qualified contact Huntington Mortgage today at (833)403-8230!