An FHA loan provides a government-insured loan with flexible loan options. Even experienced homeowners may need to plan for a long time for a new home purchase. Fortunately, FHA loans may help some buyers get into the home of their dreams with a lower down payment.
What is an FHA loan?
FHA loans are mortgages backed by the U.S. Federal Housing Administration. Lenders, such as banks and credit unions, that provide FHA loans provide funding for home purchases while requiring a lower down payment. Buyers may get into a new home with as little as 3.5% down.
Using conventional loans, a lower down payment requires the borrower to get private mortgage insurance. This special type of insurance protects the lender just in case the borrower is not able to pay. The cost of PMI is added to the monthly payment until the amount of the loan reaches 20%. FHA loans, on the other hand, do not require PMI because they are backed by the U.S. government. Additional scrutiny is often required during the loan application process using an FHA loan.
What is required for an FHA loan?
Many of the same documents are required for an FHA loan that any potential lender will want to see: employment history, appraisal, and debt-to-income ratio. A few additional stipulations are also attached to the FHA loan process. Buyers may have to bring 3.5% of the purchase price as a down payment, more if they have a credit score below 580. FHA loans are only available for the borrower’s primary residence.
Credit requirements may also be lower for FHA loans, given other factors demonstrate that the borrower is able to manage their money responsibly. Each lender looks at individual applications and may ask for additional documentation or explanations. They are often able to work with buyers with a lower credit score or shorter credit history than in other situations.
How FHA Loans Work
- Purchase your home with as little as a 3.5% down payment (compared to the 20% required on most loans).
- 30-, 25-, 20- and 15-year terms are all available with fixed rates.
- 5-year adjustable-rate mortgage available.
- Pay your mortgage off at any time without prepayment penalties.
Have questions? Give us a call! One of our mortgage specialists would be happy to answer all of your questions.
**Reach Home Loans LLC is not affiliated with or acting on behalf of or at the direction of FHA, VA, USDA, or the Federal Government.
Our experienced team is here to guide you through every step of the mortgage process. With a strong track record and access to the best resources, we make the loan process straightforward and transparent.
Adam Stephens
NMLS#: 352351
Brandon Brotsky
NMLS#: 342274
Zach Fritz
NMLS#: 2253688
Megan Straight
NMLS#: 2517049
Justin Waters
NMLS#: 1576074
Joseph Carey
NMLS#: 1907939
Daniel Rubio
NMLS#: 2051551
David Sandoval
NMLS#: 2556980
Edgard Gonzalez
NMLS#: 1052459
Why Trust Us with Your Mortgage?
We have the experience, the track record, and access to the right resources to make the home-buying process a smooth, enjoyable experience.
A Deep Understanding of All of Florida’s Loan Options
The great state of Florida offers a wide variety of loan options for all types of buyers. We’ll assess your financial situation and walk you through the best mortgage products for you.
Your Goals Are Our Goals
Your goals are our top priority. We focus on helping you achieve homeownership with tailored mortgage solutions that fit your unique financial situation and long-term objectives.
Conveniently Located in Boca Raton
Located in Boca Raton, our office is easily accessible to serve you better. Visit us for personalized mortgage services, and let our experienced team guide you through every step of the process.
What are your goals?
