FHA LOANS
Learn More About Requirements, Benefits and How to Apply For an FHA Loan With Freedom Lending Team
FHA LOAN GUIDE
What is an FHA Loan?
An FHA loan is a special kind of loan that helps make buying a house easier for many people. It’s backed by the Federal Housing Administration (FHA), which is part of the U.S. government. This type of loan is perfect if you find it challenging to save a large amount for a down payment or if your credit history isn't flawless.
Unlike traditional loans, FHA loans are designed with first-time homebuyers, individuals with lesser savings, and those with lower credit scores in mind. The goal is to lower the barriers to homeownership, making it more accessible and achievable for a broader range of people.
How Does an FHA Loan Work?
Low Down Payments
One of the most attractive features of an FHA loan is the low down payment requirement. With as little as 3.5% down, it significantly lightens the upfront cost burden of purchasing a home. For many, this difference makes homeownership a reality sooner than they thought possible.
Flexible Credit Scores
Understanding that a stellar credit score is not attainable for everybody, FHA loans offer flexibility. If your credit score is 580 or above, you're eligible for the 3.5% down payment option. Scores between 500 and 579 may still qualify for an FHA loan but will likely require a 10% down payment.
Mortgage Insurance Is a Must
To protect lenders, FHA loans require borrowers to pay mortgage insurance. This includes an upfront premium at the loan’s outset and an annual premium split into monthly payments. While this does add an extra cost, it's a key component that makes the lenient terms of FHA loans possible.
Who Should Apply for an FHA Loan?
FHA loans are particularly suited for individuals and families who are:
First-time homebuyers: Those looking to purchase their first home.Budget-conscious: Individuals who have limited savings for a down payment.Credit-rebuilding: Those who are recovering from financial setbacks and have lower credit scores.
Applying for an FHA Loan with Us
Applying for an FHA loan with us is straightforward:
1. Check Your Credit Score: Ensure you meet the minimum credit score requirements.
2.Gather Your Documentation: Collect necessary financial documents, such as proof of income, bank statements, and tax returns.
3.Complete the Application: We’re here to guide through the application process.
4.Approval: We’ll review your application and inform you of the decision.
House Hunting: With approval in hand, you can confidently start looking for your new home.
Closing: We’ll assist you with the paperwork and final processes to secure your home.
Our team is available to address any questions or concerns. Reach out to us at 702-777-2666 for personalized assistance.
FHA Loan Requirements
An FHA loan has specific requirements that applicants must meet:
Credit Score: A minimum score of 580 is preferred for optimal terms, but scores between 500-579 are considered with higher down payments.
Down Payment: Save at least 3.5% of the home's purchase price if your credit score is 580 or above; otherwise, a 10% down payment is required.
Mortgage Insurance: Predetermined premiums must be paid upfront and annually (over the loan period).
Debt-to-Income Ratio: Your total monthly debt payments should not exceed 43% of your gross monthly income.
Property Approval: The home must be approved by an FHA appraiser and meet health and safety standards.
Employment History: Stability is key. A consistent job history for the last two years is considered favorable.
Meeting these criteria is the first step in securing an FHA loan. Our team at 702-777-2666 is ready to help guide you through each requirement and make the process as smooth as possible.
Freedom Lending Team Loan Programs
Find The Right Mortgage Option For You
Conventional
Loans
When it comes to securing a conventional mortgage, trust our team to provide you with expert guidance and competitive rates. Whether you're a seasoned homeowner or a first-time buyer, we'll tailor a conventional loan solution to meet your unique financial needs and homeownership goals.
FHA
Loans
FHA loans offer a fantastic opportunity for individuals looking to purchase a home with more flexible credit requirements and a lower down payment. With an FHA loan, your path to homeownership becomes more accessible, making it an excellent choice for first-time buyers and those with credit challenges.
USDA
Loans
USDA loans, backed by the United States Department of Agriculture, are an excellent option for those seeking to buy a home in rural or suburban areas. These loans come with attractive features, such as no down payment and competitive interest rates. We specialize in USDA loans and are here to assist you in securing your dream home in eligible areas.
VA
Loans
VA loans, backed by the U.S. Department of Veterans Affairs, are a valuable opportunity for veterans, active-duty service members, and eligible spouses to achieve homeownership. With no down payment required and favorable terms, VA loans make buying a home more accessible for those who've served our country.
Jumbo
Loans
Jumbo loans offer a unique financing opportunity for individuals seeking to purchase homes that exceed the limits of conventional mortgages. These specialized loans are designed to accommodate high-value properties, giving you the flexibility and financial support needed for your luxury home purchase.
Mortgage
Refinance
Whether you're looking to lower your monthly payments, secure a better interest rate, or tap into your home's equity for major expenses, our experienced team is here to assist you. We'll work closely with you to understand your unique goals and financial circumstances, tailoring a mortgage refinance solution that aligns with your needs.
FHA Loan FAQS
Can I buy any type of property with a VA loan?
VA loans can be used to buy various types of property, including single-family homes, condos approved by the VA, and multi-unit properties, provided the buyer intends to use one of the units as their primary residence. The flexibility in property types allows service members and veterans to find homes that best suit their needs.
Is there a limit to how much I can borrow?
While the VA does not cap the amount you can borrow, there are limits to the amount of liability the VA can assume, which, in turn, affects the amount lenders may be willing to lend without requiring a down payment. It's important to discuss your borrowing limits with a qualified lender to understand how much you can finance through a VA loan.
How does the VA funding fee work?
The VA funding fee is a one-time fee paid to the Department of Veterans Affairs that helps to lower the cost of loans for U.S. taxpayers. The amount of the fee varies depending on various factors, including the type of loan and whether it's the first time using the VA loan benefit. Certain individuals, such as veterans receiving disability compensation, may be exempt from the fee.
Can I use a VA loan to buy land?
Yes, you can use a VA loan to buy land, but there are specific conditions. The land purchase must be part of the construction of a primary residence, and you must have plans to start building on the land right away. Using a VA loan solely to buy land without immediate plans for construction is not permitted. It's essential to work with a lender experienced in VA loans for land purchases and new construction to guide you through the process.
Can I have two VA loans at the same time?
Under certain circumstances, it is possible to have more than one VA loan simultaneously. This situation might occur if you're relocating for work but want to keep your current home and buy a new one in your new location. The key factor is the entitlement: the amount the VA guarantees on your loan. If you haven't used up your full entitlement with your first purchase, you might have enough remaining to use on another loan. However, the second property must also be your primary residence. Detailed rules apply, so discussing your specific situation with a VA-approved lender is crucial.
The Freedom Lending team Powered by Novus Home Mortgage, a division of Ixonia Bank NMLS 423065. Member FDIC. Equal Housing Lender
The Freedom Lending Team stands out for its commitment to making homeownership dreams come true. They are experts in various loan types, like conventional, FHA, VA, and USDA loans. This team values clear communication, personalized service, and thorough guidance. They aim to educate and support their clients from the first meeting to closing day. Whether you're buying your first home or refinancing, The Freedom Lending Team is a reliable guide in the mortgage process.
