FHA Government Insured Loans 3.5% Down Payment
How do I qualify for this Loan?
Must be employed for the past 24 months in the same field (different jobs and self employed are acceptable)
You must have a minimum of 3.5% of the mortgage amount (Gifts are acceptable). Ex. $400,000 loan = $14,000 down payment.
Minimum credit score of 580-620
Your Closing cost will be approximately 5-6% of the mortgage amount. They may included the following: (All of these costs up to 6% of the purchase price may be paid by the seller as a contribution including the down payment)
- FHA mortgage insurance premium 1.75% of Loan(this is the only cost that can be financed into the loan)
- Title Search and Insurance
- Hazard Insurance Escrow
- Property Tax Escrow
- Attorney Fees
- Appraisal Fees
- Mortgage Tax
- Filing Fees
To qualify, you will need to have at least two months of reserves: (Mortgage principal & interest, tax and insurance escrow. PITI ). Reserves may include, Mutual Funds, 401K, IRA's, retirement accounts.
FAQ regarding this type of Loan!
- Q. Who can apply?
- A. First time buyers, Repeat buyers, Owner occupied only!
- Q. How much of my income should go to mortgage payments (PITI) and debts?
- A. No more than 31% of your monthly income for Mortgage, Insurance, Taxes and HOA dues. No more than 43% of your monthly income including debts.
- Q. What if I have had a bankruptcy?
- A. If it has been discharged over 24 months and you have reestablished credit and are current it will be considered.
- Q. Why are they lending to people with lower credit scores and so little down payment.
- A. Unlike a no documentation loan and a no down payment loan, these borrowers have to be able to repay the loan and EVERYTHING is verified!
- Q. How much will my interest rate be?
- A. Competitive with any other conventional 15/30 year fixed mortgage. (This is fixed - NOT adjustable, no surprises, no teasers, no gimmicks, the same payment for the term! ) It starts low and stays low!
- Q. Why is this loan becoming popular in Westchester today?
- A. Because up until 2008 there was almost nothing available in the Loan limits. (they were less than half of today's amount) With these new amounts and falling prices there is a HUGE selection of inventory to choose from.
- Q. What if the property I am purchasing is in need of repair or a foreclosure and there is no kitchen, working boiler and the roof leaks, Etc....
- A. That's OK, you will get the extra money to fix it up based on the new appraised value after repairs. (this is the 203k mortgage program)
- Q. What if I have more questions?
- A. Call us, we are specialists in FHA loans or go to www.FHA.gov