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FHA Loan Rates Types Fixed Rate Loan

Home ownership rates in America continue to increase at a steady rate due in a large part to the implementation of FHA home loans more than seventy years ago. Over the years, FHA has helped Americans gain the financial independence that comes with owning a home. By making jobs and reasonable mortgage rates for the middle class, financing military housing, and producing housing for the low income and the elderly, FHA has helped Americans become some of the best housed people in the world with over 73 million Americans currently owning their own homes. Statistics show that by 2005, home ownership rates in the US have climbed to 69 percent.

HOW IT WORKS
By serving as an umbrella under which lenders have the confidence to extend loans to those who may not meet conventional loan requirements, FHA’s mortgage insurance allows individuals to qualify who may have been previously denied for a home loan by conventional underwriting guidelines.

FHA loans benefit those who want to buy a home but haven’t been able to place money away for the buy, like recent college graduates, newlyweds, or people who are still trying to complete their education. It also allows individuals to qualify for a FHA loan whose credit has been marred by bankruptcy or foreclosure.

NUTS AND BOLTS
The most well loved FHA home loan is the 203(b). This fixed-rate loan often works well for first time home buyers because it allows individuals to finance up to 97 percent of their home loan which helps to keep down payments and closing costs at a minimum. The 203(b) home loan is also the only loan in which 100 percent of the closing costs can be a gift from a relative, non-profit, or government agency.

Insurance on FHA mortgages are often rolled into the total monthly payment at 0.5 percent of the total loan amount which is roughly half of the price of mortgage insurance on a conventional loan. After five years or when the loan balance reaches 78 percent, the additional mortgage insurance is typically met and therefore drops off the total monthly payment.

GUIDELINES
It is not necessary to meet a minimum income requirement in order to qualify for a FHA loan but debt ratios specific to the state in which the home will be bought have been place into place to prevent borrowers from getting into a home they cannot afford. This is done through a close analysis of income and monthly expenses.

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This entry was posted on Saturday, December 13th, 2008 at 2:51 am and is filed under FHA Loan Rates, FHA Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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4 Responses to “FHA Loan Rates Types Fixed Rate Loan”

  1. How To Get FHA Loan ? | FHA Loan Rates says:
    January 24, 2009 at 3:50 am

    [...] Read additionally : FHA Loan Rates Types Fixed Rate Loan [...]

  2. FHA Loan Rates Types 203(b) | FHA Loan Rates says:
    January 24, 2009 at 3:51 am

    [...] 1-4 family homes, together with made homes, in both civic and farming areas. A section 203(b) fixed mortgage may be repaid in monthly payments over fifteen or thirty [...]

  3. FHA HOMES >> FHA Homes Tips | FHA Homes Guide! | FHA Loan Rates says:
    March 3, 2009 at 2:18 pm

    [...] As you may have known, the FHA does not lend money. The FHA insures your loan so lenders could offer you better interest rates and terms. FHA home loans have very competitive interest rates- even lower than interest rates that are offered by banks on 30 year fixed loans. [...]

  4. john says:
    September 29, 2009 at 3:31 pm

    I am currently refinancing my conventional mortgage into a FHA 30yr fixed loan, the house is at 76% Loan to value, I don’t know why the mortgage company is telling me i must have PMI. Can someone please clarify it to me why I have to have it? Everything i read states that anything under 78% does not require PMI on FHA loans. Someone help please

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