Vital Points About Shopping for A Dwelling With An FHA Mortgage
What Are Your Concerns About Buying A Home With An FHA Home Loan? For some it is about how much the loan will cost from month to month while for others the question of the long term cost of the loan can be a concern. If you are unsure of how the FHA home loan program works, then you should definitely read on.
What You Can Buy With an FHA Mortgage
In general, FHA home loans are for owners / users who want to buy a home to use as their primary residence. You can buy a property of up to four units as long as it meets the minimum standards of the FHA and you are financially qualified for the mortgage loan.
FHA loan applicants can apply for any type of FHA loan offered by a participating lender, including RV loans, prefabricated homes, condos, townhouses, mixed-use properties, etc.
The general guideline for real estate that you cannot buy or refinance with an FHA mortgage
If you do not intend to live on the property, or if your chosen property cannot be taxed as real estate (for example, if it does not have a permanent foundation when it closes) or if your chosen property is NOT a primary residence (but more of a bed and Breakfast, condo, timeshare, vacation home etc) it is not eligible for an FHA mortgage.
Certain exceptions may apply. Prefabricated homes that do not start on permanent foundations can be purchased with the requirement that the property be secured on permanent foundations that meet local / state / federal regulations.
What Kind of Loans Can You Get With FHA?
Borrowers can apply for FHA mortgages to buy or refinance a home. The home being refinanced with an FHA mortgage does not need to have an existing FHA loan, but the property must meet the FHA loan requirements.
Borrowers can see at night the options they have with an FHA mortgage or refinance loan. These options include fixed or floating rate mortgages, fixed or adjustable refinance loans, fixer-upper loans for smaller projects, and large-scale rehab loans.
Your choice of loan types also includes a choice of 15 year and 30 year mortgages. Borrowers who choose a shorter repayment period may discover alternative interest rate options depending on their qualifications and circumstances.
Remember that not all lenders can offer the same types of FHA mortgages; What is available from one financial institution may not be available from another in the same housing market. You need to have a conversation with a loan officer to see what is possible with this lender.
FHA Loans: No early withdrawal penalties and other perks
Compare the terms of an FHA home loan to traditional mortgages; Be aware of the FHA’s prohibition on penalties for paying more than your monthly mortgage payment or paying off the entire loan earlier than stated in the notice.
Depending on lender standards, state laws, and other requirements, you may need to notify the lender in writing if you intend to make an early repayment. Be sure to discuss these options with a loan officer to make sure you understand your rights and obligations for the final payment.
FHA loans also do not allow a home or condo owner buying with an FHA mortgage to be restricted on how he or she can dispose of the property. FHA loans cannot be approved for purchases with “restrictive covenants” that require the borrower to obtain approval from elsewhere before selling the home.
Borrowers applying for or believing they wish to apply for an FHA adjustable rate mortgage should compare the terms of the FHA versions of these mortgage loans.
The FHA loan rules have tightly controlled guidelines for interest rate changes and rate of change. You may not be able to predict why interest rates may change, but the FHA loan rules govern and limit these adjustments based on the type of ARM loan you are applying for.
Talk to your loan officer today about FHA home loans and refinance loan options – you might be surprised to find out more options than you think.