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FHA Loans

 

A perfect mortgage option for first time home buyers.

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Your finances don’t have to be perfect to buy a home.

Do you have bad credit? Does a 20% down payment seem unreachable? Don’t let those concerns hold you back from buying a home.

FHA Loans are a great option for home buyers in situations like this, because they are structured to allow more people to qualify for mortgage financing compared to a conventional home loan. Not all mortgage lenders offer FHA options, but at NewCastle Home Loans we’ve found FHA Loans to be a perfect fit for many potential homeowners.

The benefits of FHA loans.
  • Lower credit score requirements.

    Borrowers with credit scores of 580 and above may apply for an FHA loan. Other loans require higher minimum credit scores of at least 620.

  • Lower down payment.

    Some FHA loan options include down payments as little as 3.5%. You can also include the upfront mortgage insurance premium into the mortgage.

  • FHA accepts alternative forms of credit.

    If you have limited accounts showing on your credit report, an FHA loan offers alternatives. Stable repayment history can be determined using rental payment history or utility accounts.

  • Less costly refinancing.

    FHA also allows an FHA streamline refinance that can make refinancing simpler and less costly than conventional refinancing.

  • Less time since bankruptcy and foreclosure history.

    If you had to go through bankruptcy or foreclosure, you only need to be 1-2 years out of it for FHA Loans compared to 2-7 years for a conventional home loan.

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What else should I know?

 

 

How does FHA treats delinquent debt accounts?

Federal debts, such as tax liens and student loans, must be paid on time. Judgments must be paid in full prior to closing but minor collection accounts do not need to be paid in full.

 

 

  

FHA loans have maximum loan limits.

FHA limits the amount you can borrow based on the type and location of the property. Max loan amounts vary by county. For a list of limits per state and county click here. The FHA updates its loan limits each year.

 

You’ll have to pay a mortgage insurance premium (MIP).

You pay it every month, and it's likely you can never cancel it - at least not until you pay off the FHA loan. But you can refinance your FHA Loan into a conventional loan down the road. See how to do that here.

Get all the information you need to buy a home.
 
With more than 100 blogs and videos, we make understanding how to find the right home and the mortgage process easy.

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Contact our team to take the first step.