FLORIDA FHA MORTGAGE LOANS OFFER THE MOST BENEFITS!
The FHA mortgage is Florida mortgage loan insured by the Federal Housing Administration (FHA). The FHA does not actually lend the money to bad credit mortgage applicants, but instead insures loans made through private Florida FHA FHA-approved lenders to reduce their risk if borrowers default.
The FHA mortgage program was created in the 1930s, after a huge influx of foreclosures and defaults to give Florida mortgage lenders sufficient insurance and to make these loans more affordable and accessible to a greater number of mortgage applicants. FHA mortgage loans remain popular, particularly with bad credit and no credit and first-time home buyers with a low down payment.
FHA MORTGAGE KEY POINTS!
- Low Down payment as low as 3.5%, far below any other Florida mortgage program.
- Flexible FHA mortgage programs for No Credit Score and Bad Credit Florida mortgage applicants.
- Mortgage applicants may use money gifted from a family member for the down payment and closing costs.
- FHA mortgage loans are easier to obtain following foreclosure and bankruptcy than loans with no government guarantee.
- FHA mortgage loans are easier to qualify for an FHA mortgage with more emphasis on employment, job security and income than credit.
- FHA mortgage loans have No prepayment penalty if you pay off your mortgage early.
- FHA allows the seller to credit up to 6% of the buyers closing cost.
- FHA mortgage loans are fully assumable, which means you can sell your Florida home and allow the buyer to “assume” the mortgage allowing the new buyer to pick up where you are currently; potentially with an interest rate below average market rates.
FHA MORTGAGE DRAWBACKS!- As FHA mortgage loan do not have the same strict lending standards as a conventional loan, borrowers typically pay a cost for an FHA loan. The biggest drawback to an FHA mortgage is the cost of the FHA insurance premiums, which come in two forms: one premium is paid up front and is financed into the loan a moth, while the other is a monthly payment that is added to the Florida mortgage payment. Moreover, to qualify for an Florida FHA mortgage, the home you purchase must meet certain conditions and be appraised by an FHA-approved Florida home appraiser.
UNDERSTANDING FHA (MIP) MORTGAGE INSURANCE- Every Florida FHA mortgage comes with mortgage insurance, regardless of the size of the down payment. The FHA mortgage insurance protects the lender against loss and is always required with an FHA mortgage. With a conventional loan, mortgage insurance is only required if the down payment is less than 20%. With an FHA mortgage no matter how much money you put down you will always be required to pay the fee. Florida FHA Mortgage insurance may also be cancelled on a conforming loan, but the insurance on an Florida FHA mortgage will remain for the life of the loan.
(UFMIP) UPFRONT MORTGAGE INSURANCE PRIMIUMS- The UFMIP paid upfront t requires Florida FHA mortgage applicants to pay a premium of 1.75% of the home loan, regardless of credit. On a $200,000 FHA loan, this upfront premium will be $3,500. The mortgage insurance premium may be paid at closing or financed into the loan.
ANNUAL FHA (MIP) MORTGAGE INSURANCE PREMIUMS- The annual FHA mortgage insurance is charged monthly and depends on the Florida mortgage terms and loan-to-value ratio. Currently, it may range from 0.45% to 1.35% of the Florida mortgage amount. FHA Mortgage Loans with a term greater than 15 years and a loan amount less than or equal to $625,000 have the highest annual MIP, while Florida mortgage loans with a term of 15 years or less and a loan amount over $625,000 have the lowest FHA MIP fees.
FHA MORTGAGE QUALIFYING REQUIREMENTS
- FHA mortgages have minimum credit score of 580 for maximum financing with a down payment of at least 3.5%.
- FHA mortgage have minimum credit score of 500-579 for maximum loan-to-value ratio of 90% with a minimum down payment of 10%.
- Must have a stable employment history or have remained employed with the same employer for at least 2 years.
- Must be at least 12 months after a chapter 13 bankruptcy with good credit re-established
- Must be at least 2 years out of chapter 7 bankruptcy with good credit re-established
- Must be at least 3 years out of foreclosure with good credit re-established
- A minimum down payment of 3.5%, which may be gifted by a family member or grant.
- New FHA mortgage loans only are available for primary residence occupancy loans.
- Property appraisal must be completed by an FHA-approved appraiser
- Front-end ratio (mortgage payment plus mortgage insurance, home insurance, property taxes and any HOA fees) must be less than 31% of the borrower’s gross income. Approval is possible at a higher percentage in some cases
- Back-end ratio (mortgage plus all monthly debt) must be less than 43% of the borrower’s gross income in most cases
- Must have a valid Social Security number; be of legal age to sign a mortgage and a lawful resident of the United States.