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At Primary Residential Mortgage, Inc., we take pride in offering customers a wide selection of loan options so that people can find home financing in many different situations.
One common loan product we offer is an FHA loan. If you’d like to learn more about this popular home financing option, check out these frequently asked questions.
What does FHA stand for?
Federal Housing Administration—a government agency.
What is an FHA loan?
An FHA loan is a government insured mortgage that is designed to make buying a home more affordable. FHA loans have lower down payments and more lenient credit requirements in comparison to traditional loans.
What down payment is required with an FHA loan?
FHA down payments are much lower than traditional loans. They range from 3.5% to 10% depending on your credit score.
Do you need great credit to qualify for an FHA loan?
No. You may be eligible for an FHA loan with a credit score as low as 500 to 580. If your credit score is below 580, you may need to make a larger down payment.
Will I have to pay mortgage insurance?
Yes. FHA loans require mortgage insurance to protect the lender.
How do FHA loans make homeownership more attainable?
As mentioned earlier, FHA loans have lower down payments and more lenient credit requirements, which help more borrowers become homeowners sooner.
FHA loans also allow gift money for down payments, cosigners/borrowers who don’t live in the home and higher debt-to-income ratios.
What can I use an FHA loan for?
FHA loans can actually be used in many different situations.
An FHA loan can help you:
- Buy a new home.
- Refinance your current loan.
- Buy a home that needs renovations with a loan that includes funds for those projects.
- Buy a new home if the old home was lost in a government-declared disaster.
- Build and buy a home with a one-time-close construction loan.
- Buy a home and pay to install solar or wind energy systems.
- Refinance and install solar or wind energy systems to your current home.
If you’re interested in an FHA loan, we’d love to help you get started. Contact your local PRMI Loan Originator today.