FHA Loans

Posted in on Mortgage Center. Last modified in

FHA Loans Charlotte NC Lenders

FHA Loans (Federal Housing Administration Loans) are important for anyone who needs "insurance" on their loans. These loans do not give anyone money, so be sure not to confuse them with a regular loan. FHA Loans are good for people who need a little extra help when it comes to paying for things. FHA Loans are a huge advantage for lenders because their money is insured so if the loans default, the lender will not lose money. The program was designed in the 1930's to help the housing market rise again. There are many benefits and guidelines when it comes to FHA loans, including, being able to help families, that wouldn't normally qualify, get homes. These loans are easier to obtain and have lower interest rates so people can pay them off in a timely manner.

To qualify for a FHA Loan there are a few things you have to do.

  • Provide documentation of work history for the last two years to show a consistent history with payments and/or history with the same job.
  • Minimum credit score of 580 to receive a down payment of 3.5% or a score between 500-579 to receive a 10% down payment.
  • Debt has to be less than 43% of a persons gross monthly income.
  • Must be a resident of the US. There are exceptions but they are much harder to acquire.
  • Must receive loan through a FHA-approved Lender.

If you receive a FHA loan, you are required to have two different types of mortgage insurance. UFMIP (Up-front mortgage insurance) and monthly mortgage insurance. UFMIP is a premium that is paid at the time of closing and goes directly to FHA. Monthly mortgage insurance is collected each month and the amount is determined by the length of the loan.

There is a special loan for people that need some extra money to repair things in their homes. The amount of money received is based on the current value of the home before and after repairs. Obtaining a FHA loan isn't always easy and shouldn't be used as a way to get out of high mortgage payments. FHA loans should be used for people that need extra help paying off their mortgages for a temporary amount of time.

Charlotte is a great place to live in. Find homes for sale in Charlotte.