What Is a Federal Housing Administration (FHA) Loan?
FHA Loans Overview
Are you ready to buy a home? A FHA loan can help open doors for many borrowers. If you are working with limited income or money for a down payment, a government-insured Federal Housing Administration (FHA) home loan could be the right solution. Helping people buy homes since 1934, FHA loan programs can assist first-time homebuyers, seniors or others with limits on what they can afford.
Benefits of a FHA Loan
- A low 3.5% down payment
- Flexible income and credit requirements
- Low closing costs
- Available if you are buying your first—or fifth—home
- Purchase or refinance a home
- The interest you pay on your FHA Loan is tax-deductible1, providing an extra benefit at tax time.
FHA Loan Limits
Some FHA loans have a value cap based on location. Keep in mind that the typical FHA candidate already has some financial limits, so it may not be an issue to get the house you want and can afford.
Types of FHA Loans
Fixed Rate FHA Loans: options are available in 30, 25, 20 or 15 year terms
- All options offer the same interest rate stability
- The shorter the term, the higher monthly payments. This enables you to build up home equity more quickly. This higher equity can be available as a larger down payment on a future home purchase.
Adjustable-Rate FHA Loans: pay a low introductory rate for the first few years, then the loan rate adjusts to the current market.
- A great option if you plan to sell before the introductory period expires
- Jeff Berman with PrimeLending can offer a 5-year hybrid ARM, with an annual cap of 1 percentage point, and a lifetime cap of 5 percentage points
Cash-Out Refinance FHA Loans: Gain access to the extra equity you have built up in your home with a FHA Cash-Out Refinance
- This may be a great option if you need some extra cash and you owe less on your mortgage than your house is worth.
- Generally, you build equity when you have been in your house for some time, housing prices in your area go up, and/or you’ve made upgrades to your home.
- 203(k) allows borrowers to obtain a single loan for both acquiring and rehabilitating (minimum $5,000 of renovations) a property.
Get Started with the FHA Loan Process
Want to find out if you qualify for a FHA loan? Contact Jeff Berman, The Mortgage Go To Guy, one of the top mortgage consultants in Dallas. Simply call 214-989-7700 or complete the form below. Jeff Berman with PrimeLending can help you finance the home of your dreams!
1PrimeLending is not authorized to give tax advice. Please consult your tax adviser for tax advice for your specific situation.