Federal Housing Administration (FHA) loans are backed by the federal government to reduce risk for lenders. The government sets standards for borrower eligibility including credit history, debt ratios, property appraisals, and more. With flexible guidelines and lower money down payments, FHA loans are a great option for first-time homebuyers or those who don’t have high credit.
Buying a home for the first time can be daunting. Infiniti Mortgage in Albuquerque can assist you through the process of applying for an FHA loan. You can move into your new home in as little as 30 days after meeting with a loan officer for a face-to-face pre-qualification.
About FHA Loans
FHA loans are a great option for first-time home buyers or those with less than perfect credit scores. Infiniti Mortgage can help you get an FHA loan with a credit score as low as 620. FHA loans also offer lower down payment requirements than conventional loans, making them more affordable for many home buyers.In addition to the lower down payment requirements, FHA loans also have other benefits, such as:
- Flexible qualification guidelines: FHA loans have more flexible qualification guidelines than conventional loans, making it easier to qualify for an FHA loan even if you have less than perfect credit.
- No prepayment penalties: You can pay off your FHA loan early without penalty, which can save you money in the long run.
- Down payment and closing costs can be met with the use of 100% gift funds: This means that you can use gifts from family and friends to help pay for your down payment and closing costs, which can make an FHA loan even more affordable.
FHA Loan Requirements
FHA loans are designed to help first-time home buyers who might not otherwise qualify. They require a 3.5% down payment and a credit score of at least 620. First-time home buyers are encouraged to apply as well as those who don’t have great credit.
In addition to the minimum credit score requirements, borrowers must have at least 2 years of steady income and a debt-to-income ratio of less than 57%. Gift funds can be used for down payments, and a variety of compensating factors can be used to offset poor credit. FHA loans also have mortgage insurance premiums (MIPs) that must be paid in addition to the monthly mortgage payment. MIPs are typically lower than private mortgage insurance (PMI) premiums, and they can be canceled after 11 years of on-time payments.
FHA Loan Limits
There are income limits for the borrower and home purchase price limits for FHA mortgages that vary by program, county, household size, and other factors. However, for many homebuyers who struggle with low credit scores and lack the cash for a large down payment, an FHA loan can provide them with an affordable path to homeownership. Infiniti Mortgage will assess your employment, credit history, and finances to determine if you pre-qualify for an FHA loan.
FHA Loan Process
As with any mortgage, you will need to supply some documentation when applying for an FHA loan. This includes two years of tax returns, two recent pay stubs, your driver’s license, and full statements from your checking, savings, and 401(k) accounts. Our loan officers will run checks on all necessary information to see if you meet the requirements for an FHA loan.
FHA loans allow for lower minimum down payments and lenient credit score requirements. This opens the door to homeownership for borrowers who wouldn’t otherwise qualify based on their lack of cash or less-than-stellar credit scores. To start the process, contact one of our experienced loan officers at Infiniti Mortgage, and we’ll assist you in the process of obtaining an FHA loan.
FHA Loans from Infiniti Mortgage
FHA loans are a great way for first-time homebuyers and those with low credit scores to purchase a home they’ll love. When you’re ready to get started toward homeownership, Infiniti Mortgage has the experience necessary to assist you in gathering all the appropriate documentation and information necessary to apply. We’ll run checks to ensure you qualify for an FHA loan and help you take the first step toward homeownership.
Contact us today and speak with our experienced loan officers to get started. Infiniti Mortgage in Albuquerque is here to help you purchase the home of your dreams.