FHA loans are insured by the Federal Housing Administration and can be a great option for people who would normally find it difficult to qualify for a mortgage due to their income level, credit history, or their ability to put down a sufficient amount of down payment. For borrowers with a credit score of 580 or higher, these loans allow a down payment of just 3.5% of the total cost of the home. For those with a credit score between 500 and 579, a 10% down payment is required.
Whether you need a reduced down payment, or have not-so-perfect credit, an FHA loan remains one of the easiest loans to obtain today, benefiting first-time home buyers, as well as those who plan to make substantial repairs and need additional cash set aside for those improvements.
But there are qualifying factors for both the borrower and the home you choose. FHA loans require that a FHA-approved appraiser conduct an appraisal and it must meet certain standards of condition.
While a conventional loan typically requires a down payment of 20 percent, the down payment on an FHA loan can be as low as 3.5 percent.
Furthermore, the source of the funds used for a down payment can be (in part or whole) a gift from a family member, as well as funds obtained through a grant from a state or local home buyer’s assistance program.
Closing costs include an appraisal, a credit report, title expenses, and more, and can often be covered by the seller, or the lender themselves. A home seller may, for example, agree to cover all or part of the closing costs as part of the negotiated price. Closing costs can also be included in the loan, although a higher interest rate may apply.
Mortgage Insurance for an FHA loan is a two-part process: an initial premium (1.75 percent of the base loan amount) paid upfront, and an annual premium broken into monthly installments, included as part of the total monthly loan payment. The upfront premium is typically included in the loan. The total amount of the loan, as well as the years financed will determine the annual/monthly premium installment. Borrowers who make a larger down payment can typically reduce mortgage insurance fees, as they have personally assumed more of the risk with a larger down payment.
The Kolesar Team has been successfully securing FHA financing for our clients for over two decades.
Contact The Kolesar Team today and find out if you qualify for a FHA loan! A consultation with a member of our team can help you quickly identify if you meet the loan requirements for an FHA loan.
Working with Brendan was amazing! He always had my best interest in mind and was eager to help with anything regarding the loan process. He explained everything in a way so that I could have a better understanding. The Kolesar team were always quick to respond to my questions no matter the time of day. They were fast in processing my loan and made it easy for me while working my full time job. I was able to upload all paperwork electronically which was great. They are the best and I will be working with them again in the future for any lending needs.Lauren Hieb
This is my second loan in 6 months and the efficiency and patience with Tiffiney and Brendan were fantastic as usual. I would use them again.Deanne Bourne
I had the best experience with The Kolesar Team ! We really had no clue how to even begin the loan process and they helped us through every step of the way. Thanks again team!Arielle Dumaw Whitman
I don’t normally make endorsements of other people’s companies, but when I do – I mean it! We are beginning our 5th deal with Brendan Kolesar and his Team of experts (with 2 more hopefully in the pipeline). I’ve spent a lifetime in this business, many of my old friends have either died or retired. This caused me to seek out new young blood to work with. It isn’t easy finding professionals that really understand their profession, all the related nuances, have excellent communication skills, provide outstanding service, and are more than competitive with rates and fees. I highly recommend Brendan and The Kolesar Team!Ron Martin
Brendan and the team are as good as it gets! I’ve done multiple transactions through them over the past 5 years now and I guarantee you will be happy you used them.Scott Brouse