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FHA Loan Florida

Why choose an FHA home loan for your Next Florida home?

There are lots of good reasons Florida homebuyers choose an FHA mortgage loan over conventional home loans, especially if one or more of the following apply to you

You’re a first-time Florida homebuyer. You have less than perfect credit. You don’t have a lot of money to put down on your next Florida home. You want to keep your Florida mortgage payments as low as possible. You’re worried about your Florida mortgage payments going up. You’re worried about qualifying for a Florida home loan.

 If any of these things describe you, then an FHA loan is right for you. Why? Because FHA-insured mortgages protect private Florida FHA approved lenders against loss. Because Florida mortgage lenders are insured against loss they off you’re a better deal.  

For the Florida home buyer the FHA program can simplify the purchase of a home, making financing easier and less expensive than a conventional mortgage loan product. Some highlights of the Florida FHA loan program include:

Minimal Down Payment and Closing costs.

Down payment less than 3% of Sales Price Gifts are allowed Seller can credit up to 6% of sales price towards closing and prepaid costs. 100% Financing available No reserves required. FHA regulated closing costs.

Easier Credit Qualifying Guidelines such as:

  No minimum FICO score or credit score requirements. FHA will allow a home purchase 2 year after a Bankruptcy. FHA will allow a home purchase 3 years after a Foreclosure.

 

Other Benefits include:

 Low costs: FHA loans have low interest rates because they are insured by the  federal government

 Lower down payment:  FHA Loans have a low 3.5% down payment requirement, and the money can come from a family member, employer or grant.

 Easier approval: Because FHA insures your lFlorida mortgage lender against loss, private Florida FHA approved mortgage lenders are willing to give you mortgage terms that make it easier for you to qualify.

 No MIN FICO SCORE : You don’t have to have perfect credit to get an FHA insured mortgage. In fact, FHA loans have no minimum credit score requirements, even if you have had credit problems, such as a bankruptcy, it’s easier for you to qualify for an FHA-insured loan than a conventional loan. Bankruptcy Chapter 13 requires 12 months from filing date, and chapter 7 bankruptcy requires you to wait 24 months from discharged unless you can document death of a wage earner or extreme medial condition.

 More protection to keep your home: The FHA loan has been helping people since 1934. Should you encounter hard times after buying your home, the FHA has many options to keep you in your home and avoid foreclosure. FHA insures loans for Florida lenders against default. FHA   does not lend money or set interest rates. For the best interest rate and terms on a mortgage visit www.FHAMortgageprograms.com , for a free quote on a Florida FHA loan.

You may use an FHA-insured mortgage to purchase or refinance a new or existing 1- to 4-unit home, a condominium or a manufactured or mobile home (provided it is on a permanent foundation.

 What kinds of insured loans does FHA offer?

Fixed-rate loans – Most FHA-insured loans are fixed-rate mortgages (loans). The advantage of a fixed-rate Florida mortgage is that your interest rate stays the same during the loan period, so you know exactly how much your monthly payment will be.

 Adjustable rate loans – Most Florida first-time homebuyers are a little stretched financially. With FHA’s adjustable rate mortgage (ARM), the initial interest rate and monthly payments are low, but these may change during the life of the loan. FHA uses the 1-Year Constant Maturity Treasury Index (CMT) to calculate the changes in interest rates. An index is a measure of interest rate changes that determine how much the interest rate on an ARM will change over time.

The maximum amount that the interest rate on your loan may increase or decrease in any one year is 1 or 2 percentage points, depending upon the type of ARM you choose. Over the life of the loan, the maximum interest rate change is 5 or 6 percentage points from the initial rate. The advantage of selecting an ARM is that you may be able to expand your house-hunting value range because your initial interest rate will be low, as will your payment.

 Florida Purchase/Florida rehabilitation loans – Sometimes you might see a home you’d like to buy, but it needs a lot of work. FHA has a loan for rehabilitating and repairing single-family properties called the SF Rehabilitation Loan program (203k). You can get one loan which combines the mortgage and the cost of repairs. The mortgage amount is based on the projected value of the property with the work completed. The advantage of this loan is that you can buy a home that needs a lot of work, but have only one mortgage payment, and you can complete the repairs after buying the home.

 

How do Floirda FHA-insured loans compare to subprime loans?

Subprime loans are loans designed for homebuyers who don’t have a strong credit history or can’t qualify for a regular or prime loan. Lenders charge a high interest rate on subprime loans because the risk that a homebuyer may not make their payments is high. Because FHA insures the lender against this risk, the interest rates on FHA-insured loans are generally among the lowest in the market. Most subprime loans carry interest rates at least 3 percentage points higher than an FHA-insured loan. On a $100,000 mortgage, the monthly payment for a subprime loan would be over $200 a month higher than an FHA-insured loan.

 The majority of subprime loans are also ARMs, where the interest rate can change a lot and greatly increase your monthly payments. Most FHA-insured loans are fixed-rate loans where the mortgage payment always stays the same. If you have an FHA-insured ARM loan, the rate can’t go up by more than one or two points in a year. The fees that lenders charge their borrowers for processing a subprime loan are also generally higher than on an FHA-insured loan.

Most subprime loans carry a heavy prepayment penalty that you must pay if you want to refinance your loan to a lower interest rate. These penalties can cost you hundreds or even thousands of dollars. There is never a prepayment penalty on an FHA-insured loan. You can refinance at any time and not worry about paying any penalties.

Unfortunately, because they don’t know these facts, many homebuyers who could qualify to buy a home with a fixed-rate FHA-insured loan only apply for subprime loans. Check out an FHA-insured loan before settling for a subprime loan!

 How do FHA-insured loans compare to conventional loans?

Conventional loans usually require a larger downpayment than FHA and if you have less than perfect credit you may not qualify for an affordable mortgage with a low interest rate . The best thing to do is compare the cost of the conventional loan to an FHA-insured loan line-by-line. What are the fees for each? What is the interest rate? How much is the mortgage insurance? How much downpayment is required? For some borrowers, a conventional loan may be less expensive. For many others, getting an FHA-insured loan is the way to go.

Do you have to buy mortgage insurance on an FHA-insured loan?

Yes – as you will with most loans. There is an up front mortgage insurance
premium equal to 1.5% of the loan amount that is paid at settlement. In most cases, this mortgage insurance premium is included in your loan amount, so you are really paying it over the life of the loan. In addition, on loans with a term of greater than 15 years and a loan-to-value ratio of 90% or greater (meaning you are borrowing more than 90% of the value of the home), you will pay an annual mortgage insurance premium of 0.5% of the loan amount in monthly installments.

 Example:

Up Front Mortgage Insurance Premium

Mortgage amount: $100,000 X 1.75% = $1,500 @ 6.5% for 30 years = $ 9.48 per month

Annual Mortgage Insurance Premium

Mortgage amount: $100,000 X 0.55% = $ 500/12 months = $45.83 per month

 Total Mortgage Insurance Premium

Most loans require mortgage insurance when your down payment is less than 20% of the sales price. On conventional and subprime loans, mortgage insurance is provided by private companies. Whether private mortgage insurance is less than, equal to, or more than an FHA-insured loan’s insurance will depend upon the loan program and your qualifications.

Compare the cost of FHA to subprime and conventional types of loans over the life of your loan . Then compare how much each costs monthly. With the protection and value you get from FHA – it’s a very good deal.

 

href=”http://www.fhamortgageprograms.com/Florida”>Florida Mortgage Questions About an FHA-insured Loan

Why choose an FHA-insured loan?  There are lots of good reasons why Florida homebuyers and homeowners choose an FHA-insured loan, especially if one or more of the following apply to you:

You’re a Florida first-time homebuyer. You’re worried about qualifying for a Florida mortgage. You don’t have perfect credit. You don’t have a lot of money to put down on a Florida home. You want to keep your Florida mortgage payments as low as possible. You’re worried about your monthly Florida mortgage payments going up.

If you’re a Florida mortgage applicant and any of these things describe you, then an FHA-insured loan may be right for you. Why? Because FHA-insured loans offer many benefits to Florida homebuyers and a level of security that you won’t find in other Florida mortgage loan including:

Low cost: FHA-insured loans have competitive interest rates because the federal government insures the loans for private FHA approved lenders.

Smaller down payment requirements: FHA-insured loans have a low 3.5% down payment requirement and the money can come from a family member, grant, employer or a Florida charitable organization as a gift.

Easier qualification: Because FHA insures your Florida mortgage, lenders may be more willing to give you loan terms that make it easier for you to qualify.

Less than perfect credit: You don’t have to have perfect credit to get an FHA-insured mortgage. In fact, even if you have had credit problems, such as a bankruptcy, it’s easier for you to qualify for an FHA-insured loan than a conventional loan.

More protection to keep your home: FHA has been helping people since 1934. Should you suffer a temporary hardship after buying your home, the FHA has many options to keep you in your home and avoid foreclosure.

FHA insures loans to protect Florida lenders against default - FHA it does not lend money or set interest rates. For the best interest rate and terms on a mortgage, you should compare mortgages from several different lenders. An FHA-approved lender can help you start the loan application process.

You may use an Florida FHA mortgage to purchase or refinance a:

New or existing 1- to 4-unit home,  A Florida  condominium or a Florida Manufactured or mobile home (provided it is on a permanent foundation).

What kinds of insured loans does FHA offer?

Fixed-rate loans - Most Florida FHA loans are fixed-rate mortgages (loans). The advantage of a fixed-rate mortgage is that your interest rate stays the same during the loan period, so you know exactly how much your monthly payment will be.

Adjustable rate loans – Florida First-time homebuyers can be a little stretched financially. With FHA’s adjustable rate mortgage (ARM), the initial interest rate and monthly payments are low, but these may change during the life of the loan. FHA uses the 1-Year Constant Maturity Treasury Index (CMT) to calculate the changes in interest rates. An index is a measure of interest rate changes that determine how much the interest rate on an ARM will change over time.

Purchase a Fixer Upper with an FHA 203K – Sometimes you might see a home you’d like to buy, but it needs a lot of work. FHA has a loan for rehabilitating and repairing single-family properties called the SF Rehabilitation Loan program (203k). You can get Florida mortgage loan which combines the mortgage and the cost of repairs. The mortgage amount is based on the projected value of the property with the work completed. The advantage of this loan is that you can buy a home that needs a lot of work, but have only one mortgage payment, and you can complete the repairs after buying the home.

How do FHA-insured loans compare to subprime loans?

Subprime loans are loans designed for Florida homebuyers who don’t have a strong credit history or can’t qualify for a regular or prime loan. Florida lenders charge a high interest rate on subprime loans because the risk that a Florida homebuyer may not make their payments is high. Because FHA insures the FHA approved mortgage lender against this risk, the interest rates on FHA-insured loans are generally among the lowest in the market. Most subprime loans carry interest rates at least 3 percentage points higher than a Florida FHA-insured loan. On a $100,000 mortgage, the monthly payment for a subprime loan would be over $200 a month higher than an Florida FHA-insured loan.

How do FHA-insured loans compare to conventional loans?

Conventional loans usually require a larger down payment than FHA and if you have less than perfect credit you may not qualify for an affordable Florida mortgage with a low interest rate. The best thing to do is compare the cost of the conventional loan to an FHA-insured loan line-by-line.

Do you have to buy mortgage insurance on an FHA-insured loan?

Yes – as you will with most loans. The Housing and Economic Recovery Act of 2008 provides for a one-year moratorium on the implementation of FHA’s risk-based premiums beginning October 1, 2008.  Consequently, effective with new FHA case number assignments on or after that date, FHA will no longer base its mortgage insurance premiums on a combination of credit bureau score and loan-to-value ratio.  The new premiums (upfront and annual) to be implemented for all loans for which a case number is assigned on or after October 1, 2008, are described below.  Mortgagee Letter 2008-16 is rescinded in its entirety.  Please note that certain parts of that mortgagee letter are retained and reiterated in the guidance that follows.

Upfront Premiums:  FHA will charge an upfront premium in an amount equal to the following percentages of the mortgage: 

Purchase Money Mortgages and Full-Credit Qualifying Refinances = 1.75 Percent Streamline Refinances (all types) = 1.50 Percent

Annual Premiums:  An annual premium of .55% , to be remitted on a monthly basis, will also be charged based on the initial loan-to-value ratio and length of the mortgage (except for FHASecure delinquent mortgages)

Most loans require mortgage insurance when your downpayment is less than 20% of the sales price. On conventional and subprime loans, mortgage insurance is provided by private companies. Whether private mortgage insurance is less than, equal to, or more than an FHA-insured loan’s insurance will depend upon the loan program and your qualifications.

Compare the cost of FHA to subprime and conventional types of loans over the life of your loan. Then compare how much each one costs monthly. With the protection and value you get from FHA – you will see that it’s a very good deal for Florida homebuyers and homeowners.

 

 

Florida home with NO CREDIT SCORE!

FHA home loans were created to help increase homeownership. Florida homebuyers without a credit score can qualify for FHA financing using non traditional credit as a means of showing the lender your willingness and ability to make your monthly payments in a timely manor.

Evaluating Non Traditional Credit

When Florida mortgage lenders evaluate a borrowers non-traditional credit histories, a satisfactory payment history of at least 12 months must include the following.

No history of delinquency on Florida rental housing payments No more than one 30-day delinquency on payments due to other creditors, and No collection accounts/court records reporting (other than medical) filed within the past 12 months. Evaluating Florida Home buyers with Insufficient Credit

When evaluating borrowers with no credit references, or otherwise having only Group II references as outlined below, a satisfactory credit history, at least 12 months in duration, must include one of the following:

Group Number

Types of Credit References

Group I

Rental housing payments (subject to independent verification if the borrower is a renter), utility company reference (if not included in the rental housing payment), including gas electricity water land-line home telephone service, and cable TV.

 

Note: If the borrower is renting from a family member, request independent documents to prove regularity of payments, such as cancelled checks.

Group II

Insurance coverage (for example, medical, auto, life, renter’s insurance (not payroll deducted) payment to child care providers – made to a business providing such services school tuition retail stores – department, furniture, appliance stores, specialty stores rent to own – (for example, furniture, appliances) payment of that part of medical bills not covered by insurance Internet/cell phone services a documented 12 month history of saving by regular deposits (at least quarterly/non-payroll deducted/no NSF checks reflected), resulting in an increasing balance to the account automobile leases, or a personal loan from an individual with repayment terms in writing and supported by cancelled checks to document the payments.

 

no more than one 30-day delinquency on payments due to any Group II reference, and no collection accounts/court records reporting (other than medical) filed within the past 12 months. Underwriting Guidance for Florida mortgage applicants with Insufficient Credit

In order to enhance the likelihood of homeownership sustainability for borrowers with insufficient credit histories, the underwriting guidance below is provided.

Qualifying ratios are to be computed only on those occupying the property and obligated on the loan, and may not exceed 31 percent for the payment-to-income ratio and 43 percent for the total debt-to-income ratio. Compensating factors are not applicable for borrowers with insufficient credit references. Borrowers should have two months of cash reserves following mortgage loan settlement from their own funds (no cash gifts from any source should be counted in the cash reserves for borrowers in this category).