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Florida FHA Mortgage – Check Out the F.H.A.?s Rules, Florida FHA Mortgage

Florida FHA Mortgage – Check Out the F.H.A.?s Rules, Florida FHA Mortgage

Florida FHA Mortgage – Check Out the F.H.A.’s Rules, Florida FHA Mortgage


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Home Page > Finance > Mortgage > Florida FHA Mortgage – Check Out the F.H.A.’s Rules, Florida FHA Mortgage

Florida FHA Mortgage – Check Out the F.H.A.’s Rules, Florida FHA Mortgage

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Florida FHA Mortgage – Check Out the F.H.A.’s Rules, Florida FHA Mortgage

By: FHA home loan Lender

About the Author

To Apply for an FHA mortgage visit- http://www.fhamortgageprograms.com/florida/

http://www.fhamortgageprograms.com/mortgage/fha-loan-program.shtml

http://www.fhamortgageprograms.com/faq/fha.shtml

http://www.fhamortgageprograms.com/florida/Jacksonville/

(ArticlesBase SC #1129949)

Article Source: http://www.articlesbase.com/Florida FHA Mortgage – Check Out the F.H.A.’s Rules, Florida FHA Mortgage





Florida FHA Mortgage – Check Out the F.H.A.’s Rules

The Federal Housing Administration used to be known as a place for Florida borrowers with tarnished credit histories. But now, it has become a destination for Florida borrowers whose credentials are respectable, but not stellar. qualify for the best interest rates on a new or refinanced mortgage, you need to have a top-notch credit score and a substantial down payment or home equity. But if you have less than perfect credit and less than 20 percent in home equity, an important threshold, you’ll have to pay a lot more. And that’s why many of those Florida borrowers are turning to the F.H.A.

The F.H.A. requires down payments of only 3.5 percent and has less stringent credit requirements than conventional mortgages backed by Fannie Mae and Freddie Mac, the two government-controlled mortgage finance companies. F.H.A. mortgages also have become one of the least expensive alternatives for new mortgages and refinancing, given the increase in fees tacked onto traditional loans.

“Just about any Florida buyer that is putting down less than 20 percent needs to consider F.H.A. financing,” said Thomas Martin , executive vice president of  FHAmortgagePrograms.com. “That doesn’t mean they need to take it, but they should consider it.”

The F.H.A., which was created during the Great Depression, does not make loans, but insures mortgages that meet its guidelines. Because the F.H.A. is the only viable option for a lot of Florida mortgage applicants , its loans now account for a much larger percentage of all mortgages. In 2005 and 2006, at the height of the housing boom, only 1.8 percent of all mortgages were F.H.A.-backed, according to Inside Mortgage Finance. Last year, that number ballooned to 17.1 percent. The F.H.A. now insures 4.8 million single-family mortgages worth about 0 billion.

Historically, F.H.A. loans carried a certain stigma. They were viewed as hard-to-obtain loans for low-income consumers with checkered credit histories and small down payments. They also tended to be more expensive.

But in the current market, the opposite is often true. Qualifying for a regular Florida mortgage has become more expensive, sometimes prohibitively so, given the many fees that are now layered onto conventional loans backed by Fannie Mae and Freddie Mac.

The fees are generally levied on Florida borrowers deemed to be more risky. The charges depend on your credit score and the amount of money you’re borrowing relative to the value of your home. But they tend to hit people with credit scores under 700 and less than 20 percent in home equity. Carrying a home equity loan may result in extra fees, as will taking cash out of your home when you refinance.

The extra charges aren’t the only hurdle consumers may face. Florida mortgage applicants with less than 20 percent in home equity must also purchase private mortgage insurance. The insurance has become much more difficult to qualify for and more expensive, especially in areas where home values have declined the most.

Florida F.H.A. borrowers won’t avoid mortgage insurance, but they will escape the extra fees, lenders and mortgage brokers said. And that’s why, for many families, the F.H.A. program has become the most economical option.

If you’re having trouble securing a Florida mortgage or refinancing an existing loan, here’s what you need to know about the F.H.A’s program:

ELIGIBILITY Florida mortgage applicants  need to prove that they have sufficient income to meet their monthly mortgage payments.

Generally speaking, your payments, including taxes and insurance, should not exceed 31 percent of gross income. When you include car payments, student loans and other obligations, your total debt shouldn’t exceed more than 43 percent of your total gross income. But these thresholds are only guidelines. So if you have a larger than required down payment, or a good amount of money in the bank, you may be able to bend these rules.

The F.H.A. doesn’t impose any income limits or credit score minimums, but people with credit scores below 500 must have at least 10 percent of equity in their home to be eligible. (The average F.H.A. borrower has a score of 640.)

But to keep default rates down, many Florida  F.H.A.-approved lenders have recently started to impose their own credit score minimums — above and beyond the F.H.A’s. guidelines — and are requiring more stringent income documentation. Clearly, they’re trying to protect themselves: if a particular lender’s default rates exceed neighboring lenders, they can be audited and even removed from the program.

All Florida FHA mortgage applicants must pay an upfront mortgage premium of 1.5 to 1.75 percent of the loan, which is usually tacked onto the loan amount. You must also pay an annual mortgage insurance premium of 0.50 of the loan amount (if you are borrowing 95 percent or less of your home’s value) or 0.55 percent (if your loan is more than that).

That premium is broken down into monthly payments. The monthly mortgage premium can be canceled once the mortgage amount falls to less than 78 percent of the home’s value, but it must be paid for at least five years — and it can only be eliminated by paying down your Florida mortgage (not through appreciation in the value of your home).

Excluding the insurance premium, closing costs are about the same amount as you would pay with a traditional FLorida mortgage. All homes must be appraised — which costs about 0, on average — unless you’re refinancing an existing Florida F.H.A. loan,

Florida FHA LOAN LIMITS In many areas, loan amounts appear to hew closely to the conforming loan limits set by Fannie Mae and Freddie Mac. But F.H.A. limits are much lower in less expensive areas: in the lowest-cost areas, the F.H.A. will insure loans up to 1,050, though that number can rise to 9,750 in the costliest parts of, say, New York or California.

TYPES OF LOANS The F.H.A. never trafficked in the exotic subprime loans that started the financial crisis. The vast majority of borrowers get a 30-year fixed-rate mortgage, though it also offers 15-year fixed rates and adjustable-rate mortgages.

ADDED BENEFITS All Florida F.H.A. loans can be assumed by a new Florida FHA mortgage — as long as they qualify — which allows more flexibility if you plan on selling the home later. If mortgage rates were to rise, the new borrower is entitled to the existing interest rate.

Meanwhile, your down payment can be a gift from a family member. And co-borrowers don’t necessarily need to occupy the Florida home. Moreover, the F.H.A. is more reluctant to foreclose on its Florida FHA borrowers. It has said that borrowers in default get to keep their homes about 65 percent of the time.

 

Retrieved from “http://www.articlesbase.com/mortgage-articles/florida-fha-mortgage-check-out-the-fhas-rules-florida-fha-mortgage-1129949.html

(ArticlesBase SC #1129949)

FHA home loan Lender -
About the Author:

To Apply for an FHA mortgage visit- http://www.fhamortgageprograms.com/florida/

http://www.fhamortgageprograms.com/mortgage/fha-loan-program.shtml

http://www.fhamortgageprograms.com/faq/fha.shtml

http://www.fhamortgageprograms.com/florida/Jacksonville/

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