Because of the lower barriers to entry, FHA loans are an excellent choice for many first time homebuyers in Lone Tree. Each FHA loan is backed by the Federal Housing Administration which lets you to make a smaller down payment or qualify with a less than perfect credit score.
FHA Loans
Because of the lower barriers to entry, FHA loans are an excellent choice for many first time homebuyers in Lone Tree. Each FHA loan is backed by the Federal Housing Administration which lets you to make a smaller down payment or qualify with a less than perfect credit score.
Requirements
Credit and Down Payment
Because the Federal Government insures every FHA loan, lenders can take a greater risk and accept lower credit score than with a conventional mortgage. With a credit score of 580 or higher, you can buy a house for as little as 3.5% down. This is a very attractive offer to many people who may be just starting their careers or are living in a high cost of living area and cannot save up a full 20% down payment.
FHA loans are a little more lenient in your debt to income ratio than a conventional loan, allowing your mortgage, loans, credit card payments and other debts to be up to 50% of your monthly income.
Requirements
Credit and Down Payment
Because the Federal Government insures every FHA loan, lenders can take a greater risk and accept lower credit score than with a conventional mortgage. With a credit score of 580 or higher, you can buy a house for as little as 3.5% down. This is a very attractive offer to many people who may be just starting their careers or are living in a high cost of living area and cannot save up a full 20% down payment.
FHA loans are a little more lenient in your debt to income ratio than a conventional loan, allowing your mortgage, loans, credit card payments and other debts to be up to 50% of your monthly income.
Mortgage Insurance Premium
All FHA loans are required to pay an one time upfront insurance payment of 1.75% and carry mortgage insurance for the duration of the loan. Your monthly premium is calculated from your loan amount, length of the loan, and loan to value ratio. In general for a 30 year FHA loan, you can expect your monthly insurance payment to be around .07% of the loan amount, or $70 per $100,000 borrowed.
Mortgage Insurance Premium
All FHA loans are required to pay an one time upfront insurance payment of 1.75% and carry mortgage insurance for the duration of the loan. Your monthly premium is calculated from your loan amount, length of the loan, and loan to value ratio. In general for a 30 year FHA loan, you can expect your monthly insurance payment to be around .07% of the loan amount, or $70 per $100,000 borrowed.
FHA loans typically make a good choice for people who:
- Are first time home buyers
- Have a lower credit score
- Have limited funds for a down payment
If you think an FHA loan might be the right choice for your home purchase, or if you have any questions about the buying process, reach out to us today or get pre-qualified and we’ll be happy to help!