Loans
FHA Loans
An FHA loan is a home loan backed by the Federal Housing Administration, a part of the U.S. government. “Backed” means the government insures the loan for the lender, which lets lenders offer it to more buyers. A small down payment may be possible, with more room if your credit history is not perfect, if you qualify. Deb Gontko Klein walks buyers through each step in plain words. Serving home buyers in Arizona, California & Colorado since 2004.
Who it helps
- First-time buyers, and buyers coming back after a gap.
- Buyers with a smaller amount saved for a down payment.
- Buyers whose credit history has some bumps, if you qualify.
How it works
Down payment: For homebuyers with a credit score of at least 580, the minimum down payment is typically 3.5%. Homebuyers with a score lower than 580 still might qualify, but would need a down payment of at least 10%.
Mortgage insurance: Most FHA loans require an Up Front and Annual or Periodic mortgage insurance premium. (UFMIP and MIP) The UFMIP may be financed into the loan and the MIP is added to the monthly mortgage payment. Typically, MIP is required for the duration of the loan, except when the down payment is 10% or more. With a 10% down payment, MIP can be cancelled after 11 years.
The home: The home must meet FHA condition standards, and an appraisal — a check of the home’s value and condition by an independent professional — is required.
Things to think about
- MIP can make the total monthly cost higher than it first looks. Compare the full monthly cost, not the rate alone.
- There is a limit on how much you can borrow with an FHA loan. This varies and we can help determine the applicable limit in your area.
Questions people ask
What is an FHA loan?
A home loan backed by the Federal Housing Administration. The government backing lets lenders accept a smaller down payment and more credit history types, if you qualify.
Can I buy with a small down payment?
A small down payment may be possible, if you qualify. The exact amount depends on your credit and other checks.
Does an FHA loan work for any home?
No. The home must be your primary residence and must meet FHA condition standards.
Next step: Call Deb at (480) 550-0211 to see if an FHA loan fits you, or apply through Planet Home Lending.
Official source: U.S. Department of Housing and Urban Development: home loans
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Talk with Deb
Tell us what you want to do, and we will call you back with clear next steps. It takes about a minute. Prefer to talk now? Call (480) 550-0211.
Serving home buyers in Arizona, California & Colorado since 2004