Choosing a Federal Housing Administration (FHA) loan for your home mortgage may be an incredible opportunity to acquire a home without putting down a huge sum of money, or to potentially access some of the equity you’ve built up in your home via cash-out refinance. But it’s understandable to feel intimidated or think you’re not getting all the facts about government-backed mortgages like FHA loans.
That’s why The Federal Savings Bank offers its Learning Center to prospective borrowers—to help you make an informed choice about your homeowning future. Read on for some advice especially for prospective borrowers interested in FHA home loan options.
If you have never purchased a home before, you might qualify to take advantage of an FHA home loan created to help Americans achieve homeownership for the first time. Even if your savings aren’t as robust as you would like, “FHA loans allow down payments as low as 3.5%” according to NerdWallet, so there’s potentially no need to empty your savings account just to achieve your dream of owning a home. You may then use your saved funds for paying off debts, or improvements on your new home!
For the modern homeowner, condos may be a great starter home, especially if you qualify for a state or federal down payment assistance program. According to Department of Housing and Urban Development (HUD), “FHA insures condominium loans for up to 30-year terms to purchase or refinance a unit in an FHA-approved condominium project.” Your loan officer may help you determine whether your project is approved by the Federal Housing Administration, or they might be able to help you secure a one-time approval for the unit you want to purchase.
Don’t fret if your FICO score isn’t as high as you like. Nerdwallet also recommends that if you’re concerned about qualifying for a mortgage with your credit score, “find a lender that specializes in FHA loans” like The Federal Savings Bank. “These lenders might be more experienced at working with credit-challenged borrowers.” The team at The Federal Savings Bank is proud to help prospective borrowers maximize their current and future borrowing power, and to provide FHA loans to those who qualify.
Because the HUD offers FHA loans intended to help borrowers who need them, there are set limits on how much money you may take out with an FHA mortgage. These are issued annually and will vary from county to county depending on factors like area median income and local home prices. Learn more about FHA loan limits here at hud.gov.
If you are retired, or approaching retirement age, and you already have a primary residence, you may be eligible to take out an FHA reverse mortgage, also known as a Home Equity Conversion Mortgage (HECM) on your home. Like the conventional version, FHA reverse mortgages potentially allow you to take out an additional lump sum or line of credit with a lender—usually without making monthly payments. Instead, the loan is repaid when you leave your home for good. These are a potentially great option for supplementing retirement income to help you enjoy your retirement peacefully.
Wherever you are in your credit journey, The Federal Savings Bank is here to help you achieve your goal. Feel free to browse our Learning Center or set a time to meet with one of our loan officers for a free no-obligation consultation.
Subject to credit approval. Terms and conditions may apply. Property insurance is required on all loans secured by property.
Down payment assistance requirements are based on the mortgage insurer or guarantor’s guidelines. Borrower may fund down payment and closing costs. Down Payment Assistance Program, which assist eligible homebuyers with purchasing a home. Down payment assistance programs are not eligible for all potential homebuyers.
Eligibility requirements apply. HECM Counseling is required. Subject to credit and income approval. You must occupy the residence as your primary home. You must continue to pay for property taxes, insurance payments, homeowners association fee, home maintenance costs, and other fees as required. You must have significant cash available for the down payment. The balance of the loan grows over time and interest is charged on the balance. The loan becomes payable when the last borrower on eligible non-borrowing spouse passes away, sells the home, permanently moves out, defaults on taxes, insurance or maintenance, or otherwise does not comply with the loan terms.
This article is intended for general informational and educational purposes only and should not be construed as financial or tax advice. For more information on financial planning or investment advice, consult a registered investment advisor or financial planner. For tax advice, please consult a tax professional.