FHA loans make getting a mortgage easy.
- Do you need less stringent qualification and credit requirements?
- Is your down payment or home equity less than 20%?
- Do you have an FHA Loan and want to save money with an easy and fast FHA Streamline refinance?
If you answered “yes” to any of these questions, an FHA Loan may be right for you! The easiest way to qualify for refinancing or home buying, an FHA Loan gives you a government-insured loan with flexible choices – opt for the security of a fixed rate or the versatility of an FHA 5-year ARM.
The Federal Housing Administration (FHA) runs several programs to promote home ownership. These programs are popular because they allow borrowers to buy a home with a smaller down payment than is required by most other lenders. FHA loans make it easier for people to qualify for a mortgage, but they’re not for everybody.
Who Qualifies for a Loan?
Almost anybody can qualify for a loan. There are no income limits – like you may find with first time home buyer programs. However, there are limits on how much you can borrow. In general, you’re limited to modest loan amounts relative to home prices in your area. To find the limits in your region, visit HUD's Website.
To qualify for an FHA loan, you’ll need to have reasonable debt to income ratios In general, you have to be better than 29/41, but some programs allow up to 55%. In addition, you have to have decent credit. You don’t need outstanding credit to get an FHA loan; it just needs to be decent.
FHA Streamline Loan Requirements
FHA Streamline loans can help homeowners lower monthly mortgage payments and interest rates. But what do you need to qualify for an FHA Streamline loan? To begin, you need an existing FHA mortgage—if you don’t have an FHA loan but want to refinance, your options include conventional refinancing or applying for an FHA refinancing loan.
If you have a conventional loan you wish to refinance with an FHA refinancing loan, you’ll need to apply with the usual credit check, employment verification, debt-to-income ratio requirements and other considerations. An FHA Refinancing loan can get you many of the same results—if you refinance from a conventional loan to an FHA-insured refinancing loan you may get better rates and lower payments.
For those who do have an FHA home loan, the other requirements for FHA Streamline include:
- Being current on the existing loan with all mortgage payments made on time for the last year.
- You must own the original property for at least six months before you can qualify for refinancing.
- To refinance you’ll need an FHA-approved lender. If you don’t want to use your current lender, any bank you choose must be FHA approved.
- FHA Streamline loans do not require an appraisal, but a no-appraisal loan cannot exceed your current loan.
- Closing costs must be paid up front or arranged for through a “no-cost” FHA Streamline loan. You may also choose to include the closing costs into your loan a “with appraisal” FHA Streamline loan. In these cases you must have enough equity in the home to cover the extra amount.
Contact one of our office's today to speak to a licenced loan officer who can answer all of your questions.