
FHA loans are mortgages that are backed by the Federal Housing Administration (FHA). You may be looking into applying for an FHA loan if you are in need of a flexible, easy-qualification mortgage product with affordable rates. In this post, we answer a few frequently asked questions about FHA loans.
7 FAQs About FHA Loans
- Q: What is the down payment for an FHA loan? A: The down payment requirement for an FHA loan depends on the borrower’s credit score. If the score is between 500 and 579, the requirement is for a 10% down payment. For borrowers with credit scores of 580 and above, the down payment requirement is just 3.5%.
- Q: Do FHA loans have PMI? A: No, FHA loans do not feature PMI. But they do have a different requirement called a mortgage insurance premium (MIP). All FHA mortgages carry this requirement. Whether or not you can eventually remove the MIP from your FHA loan depends on multiple factors, including when your loan originated.
- Q: Are FHA loans assumable? A: Yes, FHA mortgages are assumable.
- Q: How do I qualify for an FHA loan? A: To determine if you are eligible for an FHA mortgage, we will look at your credit score, debt-to-income (DTI) ratio, income and employment status/history.
- Q: Are FHA loans better than conventional loans? A: No, FHA loans are neither “better” nor “worse” than conventional loans. Whether you should go with one or the other depends on the specifics of your financial scenario. In some cases, an FHA loan might be better. In others, a conventional loan might be a better option. This is something we can discuss with you in detail during your mortgage consultation.
- Q: Are FHA loans available to returning homebuyers? A: Yes, FHA mortgages are available to repeat homebuyers. It is a common misconception to believe that only first-time homebuyers are eligible. While FHA mortgages are ideally suited to many borrowers purchasing their first homes, they also can be an excellent fit for returning homebuyers.
- Q: What are the benefits of an FHA loan? A: An FHA mortgage is easy to qualify for thanks to flexible credit requirements. Additionally, FHA loans feature affordable rates and low down payments.
Apply for an FHA Loan in Oakhurst or Beyond
Granite West Funding is based in Oakhurst, and can help you buy a home with an FHA mortgage anywhere in the surrounding area or throughout California. To schedule your consultation, please call (559) 540-2275.