WHAT IS AN FHA LOAN?
An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA). In today’s market, FHA loans are very popular, especially with first-time home buyers because the requirements are less strict than conventional loans. Borrowers can qualify for an FHA loan with a down payment as little as 3.5% and a credit score of 580 or higher. It’s important to remember though, that the lower the credit score, the higher the interest borrowers will receive.
HOW IT WORKS
FHA Loan Qualification Requirements
- Credit scores as low as 580 may qualify
- Refinance up to 97.75% of your primary home’s value
- Buy a home with as little as 3.5% down (primary home)
How an FHA loan works
- Your actual payment will vary based on your situation and the current interest rates when you apply
- Pay your mortgage at any time without pre-payment penalties
- 30-, 25-, 20- and 15-year terms are all available with fixed rates
- 5-year adjustable-rate mortgages are available
Key Points
- Low credit score
- Low down-payment
- Low assets
- Low interest rate
