- What is an FHA mortgage? An FHA mortgage is a mortgage insured by the Federal Housing Administration. Florida mortgage applicants with FHA mortgages pay for mortgage insurance, which protects the Florida FHA mortgage lender from a loss if the borrower defaults on the loan.
- Why people get FHA mortgages? As a result of the aforementioned Florida FHA mortgage insurance, Florida mortgage lenders can offer FHA mortgages at attractive interest rates and with less stringent and more flexible qualifications.. The FHA is an agency within the U.S. Department of Housing and Urban Development.
- Is the FHA mortgage only for first time home buyers ? NO, FHA mortgage loans are NOT for first–time buyers only. FHA loans can be used repeat buyers alike. The FHA mortgage is often marketed as a mortgage program for “first–time buyers” because of its low down payment and easy qualifying.
FACTS YOU SHOULD KNOW INCLUDE:
- Florida FHA Mortgage Lenders must be FHA-approved- Because the FHA is not a Florida mortgage lender, but rather an insurer, Florida mortgage applicants need to get their mortgage loan through an FHA-approved Florida mortgage lender (as opposed to directly from the FHA). Not all Florida FHA approved mortgage lenders offer the same interest rate and costs or even on the same FHA mortgage programs. The FHA mortgage Costs, services and underwriting standards will vary among Florida FHA mortgage lenders or mortgage brokers, so it’s important for Florida mortgage applicants to shop around.
- There are 2- Parts to FHA Mortgage insurance- Two mortgage FHA mortgage insurance payments are required on all FHA mortgages: The upfront premium is 1.75% of the loan amount — $1,750 for a $100,000 loan. This upfront premium is paid when the borrower gets the loan. It can be financed as part of the loan amount. The 2nd is called the annual premium, although it is paid monthly. It varies based on the length of the FHA mortgage loan, the amount borrowed and the initial loan-to-value ratio, or LTV.
- The Minimum FHA down payment is 3.5%- For most Florida FHA mortgage applicants, the FHA requires a down payment of just 3.5% of the purchase price of the Florida home. That’s a “huge Benefit,” FHA Florida mortgage applicants can use their own savings to make the down payment. But other allowed sources of cash include a gift from a family member or a grant from Florida state or local government down-payment assistance program.
- The Seller Can Pay All The Costs – The FHA mortgage lenders allows the home seller or builders and FHA mortgage lenders to pay some or all the the closing cost up to 6%.
- Previous Bad Credit is OK- Minimum credit scores for FHA mortgages depend on the type of loan the borrower needs. To get a FHA mortgage with a down payment as low as 3.5%, the borrower needs a credit score of 580 or higher.Those with credit scores between 500 and 579 must make down payments of at least 10%. Florida mortgage applicants with credit scores under 500 generally are ineligible for FHA mortgages. The FHA will make allowances under certain circumstances for applicants who have what it calls “nontraditional credit history or insufficient credit” if they meet requirements.
- Financial hardship relief allowed Of course, Florida FHA mortgage insurance isn’t supposed to be an easy out for Florida mortgage applicants who are unhappy about their FHA mortgage payments. But FHA loan service can offer some relief to Florida mortgage applicants who have an FHA-insured mortgage and have suffered a serious financial hardship and are struggling to make their payments. That relief might be a temporary period of forbearance, a loan modification that would lower the interest rate or extend the payback period, or a deferral of part of the loan balance at no interest.