- FHA Loan:
- FHA mortgage loans are issued by federally qualified lenders and insured by the U.S. Federal Housing Authority, a division of the U.S. Department of Housing and Urban Development.FHA loans are an attractive option, especially for first-time homeowners:
- Generally easier to qualify for than conventional loans.
- Lower down payment requirements.
- Cannot exceed statutory loan limits.
FHA loans are an attractive option, especially for first-time homeowners in Salina, as well as all of Kansas, because it is insured by the Federal Housing Administration (FHA). Primarily, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments. Typically the borrower can be approved with 3.5% down vs 20% that is required on other loan programs.
What is a FHA Loan?
FHA Loans are an affordable method of homeownership for many home buyers. FHA Loans are insured by the Federal Housing Administration (FHA). This federal backing was instituted to motivate lenders to extend mortgages to people with less than perfect credit and to encourage them to offer loans that have smaller down payment requirements and feasible interest rates. The FHA is currently the largest insurer of residential mortgages in the world, insuring more than 40 million mortgages since 1934.
Benefits of FHA Loans
There are several benefits to consider when applying for FHA Loans, including:
- Smaller down payment compared to other loans - It can be difficult for many prospective homeowners to save up enough money for a large down payment. FHA Loans help to make the down payment more affordable because they only require a 3.5 percent down payment, even if you have less than stellar credit. Other loans will require a higher credit score and even a larger down payment in many cases.
- Competitive interest rates – Because FHA mortgages come with federally-backed mortgage insurance, lenders are more likely to let you borrow more and still have low down payments, even if you have less than perfect credit.
- Relaxed credit requirements – Do you have a credit score that needs improvement? It can take years to get your score to an ideal spot. The good news is with FHA Loans, you don’t have to have the best credit possible and many lenders will approve you as long as you don’t have too low of a credit score and you can offer enough of a down payment.
- Can use your savings to make your down payment – If you are buying a home with an FHA loan, you are able to use your savings to make your down payment. Other monetary contributions to your down payment can include grants from a state or local government down payment assistance program or gifts from a family member.
- You may pay lower closing costs – To incentivize a buyer, some sellers, builders, or lenders will actually offer to pay some of your closing costs, which can include the credit report, title, and appraisal costs.
- Can be used for manufactured housing – There are FHA loan products available if you are interested in financing a manufactured house.
- Refinancing options – In addition, to purchase mortgages, there are also FHA refinancing options. Going from an FHA purchase to an FHA refinance can help in changing your loan terms quickly.
FHA Loan Eligibility
FHA Loans have more flexible requirements than a traditional conventional mortgage. Contact us for more information.
FHA Loan Limits
Different counties have different limits on how much you can borrow for an FHA Loan. Contact us for more information.
Get Pre-Approved for a FHA Loan
If you are a first time home buyer, or simply seeking a lower down payment in Salina, or anywhere in Kansas, contact The Mortgage Company at (785) 825-8100 for more information, or fill out the form on this page.