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FHA Loans
Q: What is an FHA loan?
A: An FHA loan is a mortgage insured by the Federal Housing Administration, a government agency within the US Department of Housing and Urban Development. A borrower with a FHA loan pays for mortgage insurance which protects the lender from loss if the borrower defaults on the loan. Because of the insurance generally interest rates are lower and there are more flexible qualification requirements.
Q: How does mortgage insurance work with an FHA loan?
A: Actually two mortgage premiums are required on all FHA loans. The up front 2.25% of the loan amount and the annual premium of .55%. the up front premium is paid when the borrower gets the loan, but it can be financed as part of the loan. the annual premium is paid monthly within the loan.
Q: What is the minimum down payment?
A: The minimum down payment is 3.5%.
Q: Is Sky Financial an FHA approved lender?
A: Yes.
Q: Is there extra cash available for repair when getting an FHA loan?
A: Yes. For instance if a home buyer is purchasing an older home or foreclosure and needs to do renovations and repairs. A 203(k) Rehabilitation Mortgage Insurance Program loan allows borrowers to include cost of repairs within the home financing.
Q: What about less than perfect credit?
A: FHA loans don't have a minimum credit score. A borrower's credit worthiness is considered.
Q: Can a borrower have more than one FHA loan??
A: No. However transactions in which an existing FHA mortgage is paid off and another FHA mortgage is acquired is acceptable.
FHA Loan Checklist
- Address of residence (past two years)
- Current paycheck stubs and W-2 forms (past two years)
- Past two years of personal tax returns (past two years)
- Social Security numbers
- Names and location of your employers (past two years)
- Gross monthly salary at your current job(s)
- Checking and savings accounts
- Info about open loans you have
- Information for other real estate you own
- Approximate value of all personal property
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