FHA mortgages are a great choice for Jacksonville home buyers, especially first time home purchasers with limited savings. In this article we’ll discuss quickly just what Federal Housing Administration (Fha) loans accomplishes and also the wonderful benefits of the FHA program.
Initially it needs to be noted that FHA doesn’t actually provide funding to home buyers directly. The Federal Housing Administration simply guarantees the mortgage with accredited loan providers and lenders against loss in the event of default. FHA loans are provided to buyers through FHA qualified loan lenders/banks in Jacksonville which provide funds to consumers that have FHA insurance for the funds. FHA mortgages are designed to help individuals by offering lower required down payments. This is definitely ideal for Jacksonville first-time homeowners that may have min cash for a large down payment.
Accredited loan providers also like the FHA program because FHA guarantees that if the mortgage falls behind, then the bank gets repaid from the FHA insurance fund. The Federal Housing Administration mortgage program was first created in the 1930s as a method to assist the housing market get traction and has since helped millions of purchasers obtain a house that might have otherwise not necessarily qualified for standard financing.
FHA mortgage advantages:
FHA mortgages have grown in appeal recently due to lenders increased requirements (especially down payments) for other loans. In comparison to the other kinds of loans, FHA mortgages are typically simpler to secure because of versatile guidelines and minimize down payment specifications.
How to get started and pre approved for a FHA mortgage:
The initial step towards being approved for an FHA mortgage is to partner with a loan officer to talk about your goals. The mortgage officer will likely discuss all the application and pre-approval requirements as well. The entire process usually takes less than 20 min to complete.
General FHA mortgage criteria include:
Credit score: The minimum FHA credit rating standards is based on how much money you put down on your new house – 3.5%, 5%, 10% , and so on. The minimum criteria typically start at 600 for most lenders as of 2020.
Revealing a strong job history over the past 2 yrs. FHA standards evaluate the past 2 yrs of job history and look at a steady income history or work history with the same employer. Buyers also should have a valid ssa number and be a citizen of the US. You’ll find exclusions for resident aliens, however, these exclusions may differ from lender to lender.
FHA mortgages require a minimal down payment of 3.5% when purchasing a home – but the down payment may be a gift from family members, and so on. The subject house must be inspected by an FHA appraiser (via the lender) The home evaluation amount must be no lower than the sales price of the home.
FHA Debt to income. This might also vary slightly from lender to lender, but usually almost all loan providers need to see your debt to earnings ratios for home expenses not exceed 35% of your gross monthly income. Your total debt should not be more than 45% of your gross monthly income. Again, this number is not set in stone and may vary from lender and also the borrower.
Mortgage Insurance For FHA Loans: FHA UFMIP (PMI):
All FHA mortgages must have mortgage insurance – both in up-front loan insurance (UFMIP) on top of monthly mortgage insurance. Up-front loan insurance premium (UFMIP or MIP) is an insurance premium that’s received at time of closing and is paid directly to the Federal Housing Administration. It is financed into the loan and is 1.75% of the loan amount, no matter the credit score.
For example, for a $100,000 loan, you would pay 1.75% of the total loan amount or $1,750. The monthly insurance depends on down payment, term, among other factors.
FHA application and pre-qualification questions in Jacksonville? FHA Mortgage Source is Florida’s leading FHA loan resource, serving you 7 days a week. Please call us at ph: 800-743-7556 or submit the quick Info Request Form on the website.
Serving all of Duval and St. Johns County – Jacksonville, St. Augustine, Callahan, Jacksonville Beach Orange Park, Middleburg. update 2020