FHA Loans

Bluestar Mortgage of Orlando, is the trusted choice for FHA Loans. Give us a call at 847-230-4030 to speak with a FHA loan expert who can assist you in determining if a FHA Home loan is the right option for you. You can also click on the schedule a free consultation button above.

What is a FHA Loan

The main goal of the Federal Housing Administration (FHA) is to guard lenders against non-payment of a borrower and to boost the US housing market. By protecting home loans offered by approved lenders, the FHA makes it promising for buyers to acquire homes at great rates and with low down payment and credit score requirements.

Several FHA loans programs are accessible to accommodate a wide range of borrower needs, such as purchasing a new home, refinancing current home loans, financing renovation and rehabilitation projects, and reverse mortgages.

Who Are FHA Loans Best Suited For?

FHA home loans are a good option for people whose credit scores are 580 and higher and who have at least a 3.5% down payment. These more encouraging financial qualifications make FHA loans a popular option for first-time home buyers, though you don’t need to be a first-time buyer to qualify.

How Do FHA Loans Work?

FHA mortgages are protected by the Federal Housing Administration (FHA).

The FHA safeguards FHA loan lenders against defaults on payments. This makes it simpler for you to qualify and grants lenders to offer lower interest rates.

What Are the Qualifications for An FHA Loan?

To pass for an FHA loan, you’ll need to meet the following:

  • A minimum 3.5% down payment.
  • A debt-to-income ratio (DTI) of no more than 50% and a steady employment history. Estimate your DTI by adding your monthly debt payments (such as credit card and car payments) and dividing the total by your monthly income before taxes.
  • Money to cover the upfront mortgage insurance premium (UFMIP). The amount is usually equal to 1.75% of your loan amount.
  • Money to cover closing costs, which could be anywhere from 2 – 6% of the purchase price.

Benefits of an FHA Loan

  • Credit score requirements are lesser compared to other loans.
  • The lender can still qualify for an FHA loan even if you have had a bankruptcy or a history of other financial issues.
  • FHA loans are offered with fixed or adjustable rates and for 30- or 15-year terms.
  • FHA loans have a low down payment prerequisite of as little as 3.5%.

Refinancing

First-time homebuyers are the main candidates for FHA loans, but homeowners with current FHA loans can also take advantage to refinance with an FHA loan, which has some good benefits, too:

  • Borrowers can roll closing costs into their loans.
  • If you’ve already an existing FHA loan, you can refinance with an FHA Streamline. It requires less documentation, and you may not require an appraisal. The FHA Streamline is a worthy option if you’re not looking to take cash out.

What are the FHA Property Loan Requirements

  • Your loan can’t go beyond the loan amount limits in your area. In 2022, the FHA’s limit for lower-cost areas is set at $420,680, while the limit in high-cost areas is $970,800.
  • The property should match the FHA’s minimum property standards for safety, security, soundness, and structural integrity.
  • When buying a home, you’ll need to transfer in within 60 days of closing.
  • The property must be your principal residence. Investment properties and second homes will disqualify for FHA loans.
  • FHA minimal down payment: 3.5%. The minimal down price relies on your savings rating with an FHA loan. If you have a deposit rating of 580 or higher, the minimal down price is 3.5%.
  • The typically required FHA debt-to-income ratio is 43% or less.
  • The prerequisite for the minimum credit score is 580. But an FHA loan lender who scores between 500 and 579 may still be able to qualify, but a higher down payment may be needed.

Connect with a Bluestar Mortgage FHA Loan Expert

If you are interested in a FHA loan, call us at: 847-230-4030 to speak with a FHA loan expert who can assist you in determining if a FHA loan is the right option for you.

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