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The FHA Home Loan – What You Need To Know

By
Mortgage and Lending with Strategic Mortgage NMLS#160440

The FHA Home Loan is a loan that has for many years has served as a great program for first-time homebuyers, but the program can be a good for fit for many different of types of homeowners. Here are some of the important things you need to know about the program.

Loan Limits

            The current FHA loan limit is $271,050 in Maricopa, Pinal and Pima Counties in Arizona. Meaning that this the maximum loan size you can obtain using a FHA loan.

Down Payment Requirement

            The FHA home loan program has a minimum 3.5% down payment. In addition, the FHA home loan can only be used to purchase a primary home, in which the buyer will live in.

Credit Score

            On an FHA loan, there is not a set minimum credit score to obtain a loan, but for most lenders, the minimum credit score will be 580, but can vary from lender to lender.

Mortgage Insurance

            FHA Home loans have mortgage insurance associated with them upon the initial purchase of a loan and over the life of the loan as well. The current upfront mortgage insurance associated with an FHA loan is 1.75%. That amount can be rolled into your initial loan amount or paid in cash when you take out an FHA loan. In addition, there is also monthly mortgage insurance on an FHA loan, which varies by down payment and is based on an annual percentage. On a 30 year fixed FHA loan, the annual FHA mortgage insurance is .85% with a 3.5% down payment and .80% with a 5% or greater down payment.

Waiting Periods After Major Credit Events

            To obtain an FHA loan, you must wait three years after the completion of a short sale or foreclosure, to obtain a new loan. In addition, there is also a two year waiting period after the discharge of a chapter 7 bankruptcy to obtain a new home loan.

Debt To Income Ratios

            On an FHA loan, the programs basic guide says that your monthly mortgage payments should not exceed 29% of your monthly income and all of your monthly debts combined (including your mortgage payment) should not exceed 41% of your monthly income. However, with compensating factors, such as a steady job history, assets or good credit, it is not uncommon for higher debt to income ratios to be approved for FHA loans.

            These are some of the basics you need to know about the FHA home loan program, but of course everyone’s individual situation is unique and it is always best to speak with a licensed lender, such as Strategic Mortgage and explore all available options, for your specific situation.

  

For more information on  current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com 

Strategic Mortgage, LLC - NMLS#158804- Equal Housing Lender – AZBK#0909514

Vasilios Bill Kamboukos Jr – NMLS#160440

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