FHA Loans
The most popular FHA home loan program by far is the 203(b). This is your standard fixed rate loan for 1-4 family owner occupied houses and only requires a minimum of 3% from the borrower. This loan also permits 100% of their money needed can be a gift from a relative, non-profit organization, or government agency.
The main advantage to a FHA home loan is that the credit criteria for a borrower are not as strict as Conventional Loans sold to Fannie Mae (FNMA) or Freddie Mac (FHLMC). Someone who may have had a few credit problems or no traditional credit should not have a problem obtaining FHA financing. In addition, FHA home loans are assumable, allowing a person to take over the mortgage without the additional cost of obtaining a new loan. In addition, the seller or lender may pay for part of the "traditional" closing costs up to 6% of the purchase price of the home. The mortgage insurance premium is cheaper for an FHA loan versus a conventional loan with 3% down. Finally, FHA loans may require less income to qualify, as they will exceed he Conventional debt ratios of 28/36% as their standard 31/43%.
What was the greatest disadvantage of FHA home loans is that FHA limits the loan size that a borrower can borrow. In March 2008, this changed allowing FHA borrowers to now borrower greater amounts (see below). Others may try to convince you that the FHA upfront mortgage insurance premium (MIP) is a disadvantage. However, this amount makes just a very small increase in the borrower’s monthly payment and is partially refundable
LEE COUNTY-MAXIMUM LOAN LIMITS
SINGLE FAMILY: $ 356,250
2 FAMILY HOME: $ 456,050
3 FAMILY HOME: $ 551,250
4 FAMILY HOME: $ 685,100
For more information on FHA loans contact Schaefer Mortgage Today!
