FHA home loans are a great option for people whose credit scores are 580 and higher, and who have at least a 3.5% down payment.
These more friendly financial qualifications make FHA loans a popular option if you’re a first-time home buyer*.
*You don’t need to be a first-time buyer to qualify for an FHA loan.
FHA mortgages are insured by the Federal Housing Administration (FHA).
The FHA protects lenders against defaults on payments. This makes it easier for you to qualify and allows lenders to offer lower interest rates.
For a 30-year FHA Fixed-Rate Loan:
The following is calculated based on an interest rate of 3.625%, with a 4.628% APR (annual percentage rate) and the cost of 2.125 Points, for a total of $4,324.38 paid at closing. On a mortgage of $203,500, you would have to pay monthly payments of exactly $1,060.26.
The monthly payment in this example doesn’t include insurance premiums and taxes, meaning the total payment amount would be higher. This payment amount also assumes that the LTV, or loan-to-value, is at 74.91%.
The monthly home loan payment includes an upfront mortgage insurance premium paid once, set at 1.75% of your base loan amount, plus a MIP, or a monthly mortgage insurance premium, calculated at 0.8% of your base loan amount.
For home loans with a loan-to-value, or LTV, ratio of 74.91%, your 0.8% monthly MIP will have to be paid during the first 11 years of your term. After that, your monthly mortgage payment will consist of two equal parts: the monthly principal and the interest payments until the end of your loan.
For a 25-year FHA Fixed-Rate Loan:
The following is calculated based on an interest rate of 3.625%, with a 4.755% APR (annual percentage rate) and the cost of 2.125 Points, for a total of $4,324.38 paid at closing. On a mortgage of $203,500, you would have to pay monthly payments of exactly $1,164.28.
The monthly payment in this example doesn’t include insurance premiums and taxes, meaning the total payment amount would be higher. This payment amount also assumes that the LTV, or loan-to-value, is at 74.91%.
The monthly home loan payment includes an upfront mortgage insurance premium paid once, set at 1.75% of your base loan amount, plus a MIP, or a monthly mortgage insurance premium, calculated at 0.8% of your base loan amount.
For home loans with a loan-to-value, or LTV, ratio of 74.91%, your 0.8% monthly MIP will have to be paid during the first 11 years of your term. After that, your monthly mortgage payment will consist of two equal parts: the monthly principal and the interest payments until the end of your loan.
For a 15-year FHA Fixed-Rate Loan:
The following is calculated based on an interest rate of 3.375%, with a 4.581% APR (annual percentage rate) and the cost of 2.00 Points, for a total of $4,070.00 paid at closing. On a mortgage of $203,500, you would have to pay monthly payments of exactly $1,515.55.
The monthly payment in this example doesn’t include insurance premiums and taxes, meaning the total payment amount would be higher. This payment amount also assumes that the LTV, or loan-to-value, is at 74.91%.
The monthly home loan payment includes an upfront mortgage insurance premium paid once, set at 1.75% of your base loan amount, plus a MIP, or a monthly mortgage insurance premium, calculated at 0.45% of your base loan amount.
For home loans with a loan-to-value, or LTV, ratio of 74.91%, your 0.45% monthly MIP will have to be paid during the first 11 years of your term. After that, your monthly mortgage payment will consist of two equal parts: the monthly principal and the interest payments until the end of your loan.
There are other great benefits, too:
Call us now to get personalized recommendations about FHA mortgages, or to discuss different options.
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