FHA HOME LOANS
WHAT IS FHA
FHA loan is a federal assistance mortgage loan in the United States
insured by the Federal Housing Housing Administration. The loan may
be issued by federally qualified lenders.
FHA loans have historically allowed lower income Americans to
borrow money for the purchase of a home that they would not
otherwise be able to afford. The program originated during the Great
Depression of the 1930, when the rates of foreclosures and defaults
rose sharply, and the program was intended to provide lenders with
sufficient insurance. Some FHA programs were subsidized by
government, but the goal was to make it self-supporting, based on
insurance premiums paid by borrowers.
Over time, private mortgage insurance (PMI) companies came into
play, and now FHA primarily serves people who cannot afford a
conventional down payment or otherwise do not qualify for PMI
insurance.
How to Obtain an FHA Loan?
CONTACT A MORTGAGE BROKER
FHA does not make loans. Rather, it insures loans made by private
lenders. The first step in obtaining an FHA loan is to contact several
lenders and/or mortgage brokers and ask them if they originate FHA
loans. As each lender sets its own rates and terms, comparison
shopping is important in this market.
Second, the potential lender assesses the prospective home buyer
for risk. The analysis of one's debt to income ratio enables the buyer
to know what type of home can be afforded based on monthly income
and expenses and is one risk metric considered by the lender. Other
factors, e.g. payment history on other debts, are considered and used
to make decisions regarding eligibility and terms for a loan.
Section 251 insures home purchase or refinancing loans with interest
rates that may increase or decrease over time, which enables
consumers to purchase or refinance their home at a lower initial
interest rate.
FHA's mortgage insurance programs help low- and moderate-income
families become homeowners by lowering some of the costs of their
mortgage loans. FHA mortgage insurance also encourages lenders to
make loans to otherwise credit-worthy borrowers and projects that
might not be able to meet conventional underwriting requirements,
protecting the lender against loan default on mortgages for properties
that meet certain minimum requirements -- including manufactured
homes, single and multifamily properties, and some health-related
facilities. The basic FHA mortgage insurance program is Mortgage
Insurance for One- to Four-Family Homes (Section 203(b)).
The Federal Housing Administration (FHA) is a United States
government agency created as part of the National Housing Act of
1934. The goals of this organization are: to improve housing
standards and conditions; to provide an adequate home financing
system through insurance of mortgage loans; and to stabilize the
mortgage market..
----------------------------------------------------------------------------
History
During the Great Depression, the banking system failed, causing a
drastic decrease in home loans and ownership. At this time, most
home mortgages were short-term (three to five years), no
amortization, balloon instruments at loan-to-value (LTV) ratios below
fifty to sixty percent. The banking crisis of the 1930’s forced all
lenders to retrieve due mortgages. Refinancing was not available,
and many borrowers, now unemployed, were unable to make
mortgage payments. Consequently, many homes were foclosed,
causing the housing market to plummet. Banks collected the loan
collateral (foreclosed homes) but the low property values resulted in
a relative lack of assets. Because there was little faith in the backing
of the U.S. government, few loans were issued and few new homes
were purchased.
In 1934, the federal banking system was restructured. The National
Housing Act of 1934 was passed and the Federal Housing
Administration was created. Its intent was to regulate the rate of
interest and the terms of mortgages that it insured. These new lending
practices increased the number of people who could afford a down
payment on a house and monthly debt service payments on a
mortgage, thereby also increasing the size of the market for single-
family homes. (Garvin 2002)
-------------------------------------------------------------------------------
How a FHA Mortgage Works
The FHA does not lend the money; it simply insures that the total
mortgage will be paid to the lender if the buyer defaults. It is always
the decision of the private lender (a bank, credit union, or savings
and loan) to decide whether or not they will lend the money.
The FHA mortgage program tends to be more forgiving than
conventional mortgages in terms of past credit history. A bankruptcy
discharged as little as two years ago may not hinder a homebuyer
from qualifying for the FHA program.
Typically, FHA mortgages do not require more than a 3-5 percent
down payment. Unlike traditional loans, this money may also be a gift
to the homebuyer and does not need to be secured as the
homebuyer's own money. Often, there are "points" associated with
FHA mortgages that are usually worth about 1 percent of the total
mortgage value. These points are paid to lenders to help lower the
interest rate of the mortgage.
Borrowers will also have to pay PMI (private mortgage insurance) on
the mortgage. PMI is used to ensure that the total amount of the
mortgage will be paid to the lender if the buyer defaults. Usually, a
PMI will not?? be put into effect until 20 percent of the mortgage has
been paid.
FHA mortgages have no mortgage value cap. In other words, you can
take out a FHA mortgage for $150,000 - $300,000 without any
restrictions, other than credit applicability.
Closing costs on FHA (or conventional loans) are usually between 2-3
percent of the total mortgage amount and are the responsibility of the
buyer. However, FHA closing costs can be financed into the total
amount of the mortgage and paid off accordingly.
-------------------------------------------------------------------------
Qualifying For a FHA Mortgage
To be approved for a FHA mortgage, you must have a satisfactory
credit history, which shows your commitment to paying off debts in a
timely manner. Also, you must be able to prove that the total monthly
mortgage payment will be less than 29 percent of your monthly
income. The number arrived at after multiplying your total monthly
income by 29 percent is referred to as PITI, or principle, interest,
property taxes, and insurance. The PITI amount is the highest amount
that your monthly mortgage payments may be. Furthermore, long-term
debt, such as car loans and credit card balances, in addition to the
monthly PITI amount cannot be more than 41 percent of your total
monthly income. More information about loan qualifications is
available from the FHA.
While these qualifications may seem a little stringent, they are
actually more lenient than traditional mortgage qualifications. The
decreased down payment makes this type of mortgage even more
desirable for many people.
---------------------------------------------------------------------------------
WHAT IS FHA
FHA loan is a federal assistance mortgage loan in the United States
insured by the Federal Housing Housing Administration. The loan may
be issued by federally qualified lenders.
FHA loans have historically allowed lower income Americans to
borrow money for the purchase of a home that they would not
otherwise be able to afford. The program originated during the Great
Depression of the 1930, when the rates of foreclosures and defaults
rose sharply, and the program was intended to provide lenders with
sufficient insurance. Some FHA programs were subsidized by
government, but the goal was to make it self-supporting, based on
insurance premiums paid by borrowers.
Over time, private mortgage insurance (PMI) companies came into
play, and now FHA primarily serves people who cannot afford a
conventional down payment or otherwise do not qualify for PMI
insurance.
How to Obtain an FHA Loan?
CONTACT A MORTGAGE BROKER
FHA does not make loans. Rather, it insures loans made by private
lenders. The first step in obtaining an FHA loan is to contact several
lenders and/or mortgage brokers and ask them if they originate FHA
loans. As each lender sets its own rates and terms, comparison
shopping is important in this market.
Second, the potential lender assesses the prospective home buyer
for risk. The analysis of one's debt to income ratio enables the buyer
to know what type of home can be afforded based on monthly income
and expenses and is one risk metric considered by the lender. Other
factors, e.g. payment history on other debts, are considered and used
to make decisions regarding eligibility and terms for a loan.
Section 251 insures home purchase or refinancing loans with interest
rates that may increase or decrease over time, which enables
consumers to purchase or refinance their home at a lower initial
interest rate.
FHA's mortgage insurance programs help low- and moderate-income
families become homeowners by lowering some of the costs of their
mortgage loans. FHA mortgage insurance also encourages lenders to
make loans to otherwise credit-worthy borrowers and projects that
might not be able to meet conventional underwriting requirements,
protecting the lender against loan default on mortgages for properties
that meet certain minimum requirements -- including manufactured
homes, single and multifamily properties, and some health-related
facilities. The basic FHA mortgage insurance program is Mortgage
Insurance for One- to Four-Family Homes (Section 203(b)).
The Federal Housing Administration (FHA) is a United States
government agency created as part of the National Housing Act of
1934. The goals of this organization are: to improve housing
standards and conditions; to provide an adequate home financing
system through insurance of mortgage loans; and to stabilize the
mortgage market..
----------------------------------------------------------------------------
History
During the Great Depression, the banking system failed, causing a
drastic decrease in home loans and ownership. At this time, most
home mortgages were short-term (three to five years), no
amortization, balloon instruments at loan-to-value (LTV) ratios below
fifty to sixty percent. The banking crisis of the 1930’s forced all
lenders to retrieve due mortgages. Refinancing was not available,
and many borrowers, now unemployed, were unable to make
mortgage payments. Consequently, many homes were foclosed,
causing the housing market to plummet. Banks collected the loan
collateral (foreclosed homes) but the low property values resulted in
a relative lack of assets. Because there was little faith in the backing
of the U.S. government, few loans were issued and few new homes
were purchased.
In 1934, the federal banking system was restructured. The National
Housing Act of 1934 was passed and the Federal Housing
Administration was created. Its intent was to regulate the rate of
interest and the terms of mortgages that it insured. These new lending
practices increased the number of people who could afford a down
payment on a house and monthly debt service payments on a
mortgage, thereby also increasing the size of the market for single-
family homes. (Garvin 2002)
-------------------------------------------------------------------------------
How a FHA Mortgage Works
The FHA does not lend the money; it simply insures that the total
mortgage will be paid to the lender if the buyer defaults. It is always
the decision of the private lender (a bank, credit union, or savings
and loan) to decide whether or not they will lend the money.
The FHA mortgage program tends to be more forgiving than
conventional mortgages in terms of past credit history. A bankruptcy
discharged as little as two years ago may not hinder a homebuyer
from qualifying for the FHA program.
Typically, FHA mortgages do not require more than a 3-5 percent
down payment. Unlike traditional loans, this money may also be a gift
to the homebuyer and does not need to be secured as the
homebuyer's own money. Often, there are "points" associated with
FHA mortgages that are usually worth about 1 percent of the total
mortgage value. These points are paid to lenders to help lower the
interest rate of the mortgage.
Borrowers will also have to pay PMI (private mortgage insurance) on
the mortgage. PMI is used to ensure that the total amount of the
mortgage will be paid to the lender if the buyer defaults. Usually, a
PMI will not?? be put into effect until 20 percent of the mortgage has
been paid.
FHA mortgages have no mortgage value cap. In other words, you can
take out a FHA mortgage for $150,000 - $300,000 without any
restrictions, other than credit applicability.
Closing costs on FHA (or conventional loans) are usually between 2-3
percent of the total mortgage amount and are the responsibility of the
buyer. However, FHA closing costs can be financed into the total
amount of the mortgage and paid off accordingly.
-------------------------------------------------------------------------
Qualifying For a FHA Mortgage
To be approved for a FHA mortgage, you must have a satisfactory
credit history, which shows your commitment to paying off debts in a
timely manner. Also, you must be able to prove that the total monthly
mortgage payment will be less than 29 percent of your monthly
income. The number arrived at after multiplying your total monthly
income by 29 percent is referred to as PITI, or principle, interest,
property taxes, and insurance. The PITI amount is the highest amount
that your monthly mortgage payments may be. Furthermore, long-term
debt, such as car loans and credit card balances, in addition to the
monthly PITI amount cannot be more than 41 percent of your total
monthly income. More information about loan qualifications is
available from the FHA.
While these qualifications may seem a little stringent, they are
actually more lenient than traditional mortgage qualifications. The
decreased down payment makes this type of mortgage even more
desirable for many people.
---------------------------------------------------------------------------------
WHO CAN BE QUALIFIED?
WHAT ARE THE REQUIREMENTS?
Purpose:
The Federal Housing Administration (FHA) makes it easier for
consumers to obtain affordable home improvement loans by
insuring loans made by private lenders to improve properties that
meet certain requirements. "Lending institutions make loans from
their own funds to eligible borrowers to finance these
improvements."
Type of Assistance:
The Title I program insures loans to finance the light or moderate
rehabilitation of properties, as well as the construction of
nonresidential buildings on the property. This program may be
used to insure such loans for up to 20 years on either single- or
multifamily properties. The maximum loan amount is $25,000 for
improving a single-family home or for improving or building a
nonresidential structure.
For improving a multifamily structure, the maximum loan amount
is $12,000 per family unit, not to exceed a total of $60,000 for the
structure. These are fixed-rate loans, for which lenders charge
interest at market rates. The interest rates are not subsidized by
HUD, although some communities participate in local housing
rehabilitation programs that provide reduced-rate property
improvement loans through Title I lenders.
FHA insures private lenders against the risk of default for up to 90
percent of any single loan. The annual premium for this insurance
is $1 per $100 of the amount advanced; although this fee may be
charged to the borrower separately, it is sometimes covered by a
higher interest charge.
Eligible Lenders:
Only lenders approved by HUD specifically for this program can
make loans covered by Title I insurance. Title I loans can be
disbursed directly to the borrower or, if the loan is made through a
dealer, the disbursement will be made jointly to the dealer and the
borrower. While most lenders and dealers/contractors use this
program responsibly, HUD urges consumers to use caution in
choosing and supervising home repair dealers/contractors
conducting Title I repair/renovation work. Previously HUD had
reviewed some Title I dealer loans and discovered several
instances of unscrupulous dealers/contractors performing shoddy
work, falsifying documents, overcharging homeowners and use of
deceptive advertising. HUD has taken new measures in an
attempt to prevent further occurrences in dealer originated loans.
Eligible Customers:
Eligible borrowers include the owner of the property to be
improved, the person leasing the property (provided that the lease
will extend at least 6 months beyond the date when the loan must
be repaid), or someone purchasing the property under a land
installment contract.
Eligible Activities:
Title I loans may be used to finance permanent property
improvements that protect or improve the basic livability or utility
of the property--including manufactured homes, single-family and
multifamily homes, nonresidential structures, and the preservation
of historic homes. The loans can also be used for fire safety
equipment.
Application:
Applications must be submitted to a Title I-approved lender. Our
web site offers a searchable list of approved lenders.
What is a 203(b) loan?
This is the most commonly used FHA program. it offers a low down
payment, flexible qualifying guidelines, limited lender's fees, and a
maximum loan amount.
This is a loan that enables the homebuyer to finance both the
purchase and rehabilitation of a home through a single mortgage.
A portion of the loan is used to pay off the seller's existing
mortgage and the remainder is placed in an escrow account and
released as rehabilitation is completed. Basic guidelines for
203(k) loans are as follows:
The home must be at least one year old.
The cost of rehabilitation must be at least $5,000, but the total
property value - including the cost of repairs - must fall within the
FHA maximum mortgage limit.
The 203(k) loan must follow many of the 203(b) eligibility
requirements.
Talk to your lender about specific improvement, energy efficiency,
and structural guidelines.
What is an energy efficient mortgage (EEM)?
The Energy Efficient Mortgage allows a homebuyer to save future
money on utility bills. This is done by financing the cost of adding
energy-efficiency features to a new or existing home as part of an
FHA-insured home purchase. The EEM can be used with both
203(b) and 203(k) loans. Basic guidelines for EEMs are as follows:
The cost of improvements must be determined by a Home Energy
Rating System or by an energy consultant. This cost must be less
than the anticipated savings from the improvements.
One- and two-unit new or existing homes are eligible; condos are
not.
The improvements financed may be 5% of property value or
$4,000, whichever is greater. The total must fall within the FHA
loan limit.
What is the FHA bridal registry program?
Just as you might register at a department store for wedding gifts,
the Bridal Registry program allows couples to register with a
lender and open up an interest-bearing account. Family and friends
can deposit wedding gifts of cash into this account. These gifts
can then be applied toward a down payment on a home. Ask your
lender for details.
What is a Title 1 loan?
Given by a Lender and insured by the FHA, a Title I loan is used to
make non-luxury renovations and repairs to a home. It offers a
manageable interest rate and repayment schedule. Loans are
limited to between $5,000 and 20,000. If the loan amount is under
7,500, no lien is required against your home. Ask your lender for
details.
What other loan products or programs does the FHA offer?
The FHA also insures loans for the purchase or rehabilitation of
manufactured housing, condominiums, and cooperatives. It also
has special programs for urban areas, disaster victims, and
members of the armed forces. Insurance for ARMS is also
available from the FHA.
How can I obtain FHA-insiured loan?
Contact an FHA-approved lender such as a participating mortgage
company, bank, savings and loan association, or thrift. For more
information on the FHA and how you can obtain an FHA loan, visit
the call a HUD-approved counseling agency at 1-800-569-4287 or
TDD: 1-800-877-8339.
WWW.KNOWLEDGEFINANCIAL.COM
WHAT ARE THE REQUIREMENTS?
Purpose:
The Federal Housing Administration (FHA) makes it easier for
consumers to obtain affordable home improvement loans by
insuring loans made by private lenders to improve properties that
meet certain requirements. "Lending institutions make loans from
their own funds to eligible borrowers to finance these
improvements."
Type of Assistance:
The Title I program insures loans to finance the light or moderate
rehabilitation of properties, as well as the construction of
nonresidential buildings on the property. This program may be
used to insure such loans for up to 20 years on either single- or
multifamily properties. The maximum loan amount is $25,000 for
improving a single-family home or for improving or building a
nonresidential structure.
For improving a multifamily structure, the maximum loan amount
is $12,000 per family unit, not to exceed a total of $60,000 for the
structure. These are fixed-rate loans, for which lenders charge
interest at market rates. The interest rates are not subsidized by
HUD, although some communities participate in local housing
rehabilitation programs that provide reduced-rate property
improvement loans through Title I lenders.
FHA insures private lenders against the risk of default for up to 90
percent of any single loan. The annual premium for this insurance
is $1 per $100 of the amount advanced; although this fee may be
charged to the borrower separately, it is sometimes covered by a
higher interest charge.
Eligible Lenders:
Only lenders approved by HUD specifically for this program can
make loans covered by Title I insurance. Title I loans can be
disbursed directly to the borrower or, if the loan is made through a
dealer, the disbursement will be made jointly to the dealer and the
borrower. While most lenders and dealers/contractors use this
program responsibly, HUD urges consumers to use caution in
choosing and supervising home repair dealers/contractors
conducting Title I repair/renovation work. Previously HUD had
reviewed some Title I dealer loans and discovered several
instances of unscrupulous dealers/contractors performing shoddy
work, falsifying documents, overcharging homeowners and use of
deceptive advertising. HUD has taken new measures in an
attempt to prevent further occurrences in dealer originated loans.
Eligible Customers:
Eligible borrowers include the owner of the property to be
improved, the person leasing the property (provided that the lease
will extend at least 6 months beyond the date when the loan must
be repaid), or someone purchasing the property under a land
installment contract.
Eligible Activities:
Title I loans may be used to finance permanent property
improvements that protect or improve the basic livability or utility
of the property--including manufactured homes, single-family and
multifamily homes, nonresidential structures, and the preservation
of historic homes. The loans can also be used for fire safety
equipment.
Application:
Applications must be submitted to a Title I-approved lender. Our
web site offers a searchable list of approved lenders.
What is a 203(b) loan?
This is the most commonly used FHA program. it offers a low down
payment, flexible qualifying guidelines, limited lender's fees, and a
maximum loan amount.
This is a loan that enables the homebuyer to finance both the
purchase and rehabilitation of a home through a single mortgage.
A portion of the loan is used to pay off the seller's existing
mortgage and the remainder is placed in an escrow account and
released as rehabilitation is completed. Basic guidelines for
203(k) loans are as follows:
The home must be at least one year old.
The cost of rehabilitation must be at least $5,000, but the total
property value - including the cost of repairs - must fall within the
FHA maximum mortgage limit.
The 203(k) loan must follow many of the 203(b) eligibility
requirements.
Talk to your lender about specific improvement, energy efficiency,
and structural guidelines.
What is an energy efficient mortgage (EEM)?
The Energy Efficient Mortgage allows a homebuyer to save future
money on utility bills. This is done by financing the cost of adding
energy-efficiency features to a new or existing home as part of an
FHA-insured home purchase. The EEM can be used with both
203(b) and 203(k) loans. Basic guidelines for EEMs are as follows:
The cost of improvements must be determined by a Home Energy
Rating System or by an energy consultant. This cost must be less
than the anticipated savings from the improvements.
One- and two-unit new or existing homes are eligible; condos are
not.
The improvements financed may be 5% of property value or
$4,000, whichever is greater. The total must fall within the FHA
loan limit.
What is the FHA bridal registry program?
Just as you might register at a department store for wedding gifts,
the Bridal Registry program allows couples to register with a
lender and open up an interest-bearing account. Family and friends
can deposit wedding gifts of cash into this account. These gifts
can then be applied toward a down payment on a home. Ask your
lender for details.
What is a Title 1 loan?
Given by a Lender and insured by the FHA, a Title I loan is used to
make non-luxury renovations and repairs to a home. It offers a
manageable interest rate and repayment schedule. Loans are
limited to between $5,000 and 20,000. If the loan amount is under
7,500, no lien is required against your home. Ask your lender for
details.
What other loan products or programs does the FHA offer?
The FHA also insures loans for the purchase or rehabilitation of
manufactured housing, condominiums, and cooperatives. It also
has special programs for urban areas, disaster victims, and
members of the armed forces. Insurance for ARMS is also
available from the FHA.
How can I obtain FHA-insiured loan?
Contact an FHA-approved lender such as a participating mortgage
company, bank, savings and loan association, or thrift. For more
information on the FHA and how you can obtain an FHA loan, visit
the call a HUD-approved counseling agency at 1-800-569-4287 or
TDD: 1-800-877-8339.
WWW.KNOWLEDGEFINANCIAL.COM
WWW.KNOWLEDGEFINANCIAL.COM
 |  |  |  |  |  |  |  |  |
 |  |  |  |  |  |  |  |
 |  |  |  |  |
| LET FHA LOANS HELP YOU! FHA MORTGAGE LOAN REFINANCE PROGRAMS: PROGRAMS: FHA loans have been helping people become homeowners since 1934. How do we do it? The Federal Housing Administration (FHA) – which is part of HUD – insures the loan, so your lender can offer you a better deal. Low down payments Low closing costs Easy credit qualifying ------------------------------FHA HAS Programs that help low and moderate income families become homeowners by lowering some of the costs of their mortgage loans |
| BUYING YOUR FIRST HOME! FHA might be just what you need. Your down payment can be as low as 3% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties. --------------------------------------------------------------- own a home that you want to re-model or repair, you can refinance what you owe and add the cost you can refinance what you owe and add the cost of repairs - all in one loan. of repairs - all in one loan. |
| REVERSE MORTGAGE Are you 62 or older? Do you live in your home? Do you own it outright or have a low loan balance? If you can answer "yes" to all of these questions, then the FHA Reverse Mortgage might be right for you. It lets you convert a portion of your equity into cash. REVERSE MORTGAGE A program for homeowners 62 and older who have paid off their mortgages or have only small mortgage balances remaining. The program allows homeowners to borrow against the equity in their homes in a lump sum, on a monthly basis for a fixed term or for as long as they live in the home, or on an occasional basis as a line of credit. CALL: 786-709-6577 FOR MORE DETAILS. |
The Federal Housing Administration (FHA) makes it
easier for consumers to obtain affordable home
improvement loans by insuring loans made by private
lenders to improve properties that meet certain
requirements. This is one of HUD's most frequently used
loan insurance products.
CALL: FOR MORE DETAILS.
easier for consumers to obtain affordable home
improvement loans by insuring loans made by private
lenders to improve properties that meet certain
requirements. This is one of HUD's most frequently used
loan insurance products.
CALL: FOR MORE DETAILS.
FHA Section 203(k)
insurance enables
homebuyers and
homeowners to finance both
the purchase (or
refinancing) of a house and
the cost of its rehabilitation
through a single mortgage
or to finance the
rehabilitation of their
existing home.
FHA Section 203(k) is one of
many FHA programs that
insure mortgage loans, and
thus encourage mortgage
companies to make
mortgage credit available to
borrowers who would not
otherwise qualify for
conventional loans on
affordable terms (such as
first time homebuyers) and
to residents of
disadvantaged
neighborhoods (where
mortgages may be hard to
get).
insurance enables
homebuyers and
homeowners to finance both
the purchase (or
refinancing) of a house and
the cost of its rehabilitation
through a single mortgage
or to finance the
rehabilitation of their
existing home.
FHA Section 203(k) is one of
many FHA programs that
insure mortgage loans, and
thus encourage mortgage
companies to make
mortgage credit available to
borrowers who would not
otherwise qualify for
conventional loans on
affordable terms (such as
first time homebuyers) and
to residents of
disadvantaged
neighborhoods (where
mortgages may be hard to
get).
 |  |  |  |  |
 |  |  |  |  |  |  |  |  |  |
| F H A MORTGAGE LOANS, THE GOVERNMENT IS THERE TO HELP YOU PURCHASE YOUR HOME. PLEASE CONTACT US WE WILL SHOW YOU THE WAY . INTEREST RATES HAVE DRASTICALLY DROPPED; -------WHAT A BETTER TIME TO INVEST IN REAL ESTATE, OR TO REFINANCE AN EXISTING PROPERTY? THIS IS A GOLDEN OPPORTUNITY TO TAKE ADVANTAGE OF THE LOW INTEREST RATES TO REFINANCE OR TO PURCHASE A NEW PROPERTY. FEDERAL GOVERNMENT HAS TAKING THIS DRASTIC DECISION TO REDUCE THE RATE TO HELP BUYERS, AND TO HELP HOMEOWNERS WITH HIGH INTEREST RATES TO REFINANCE AT A LOWER RATE. ------- |
HOME SELLING: We have buyers interested in buying: Single-family, condos, town-homes multi-family & commercial
properties in Miami Dade county, Broward, Palm Beach, Fort Myers and Port St Lucie area.
We are looking for sellers.----------WE SELL FAST AND FOR THE TOP PRICE
Call us for free consultation and valuation of your property.
properties in Miami Dade county, Broward, Palm Beach, Fort Myers and Port St Lucie area.
We are looking for sellers.----------WE SELL FAST AND FOR THE TOP PRICE
Call us for free consultation and valuation of your property.
 |  |  |  |  |  |  |  |
| REAL ESTATE: BUYING, SELLING, LEASING A PROPERTY IN SOUTH FLORIDA. CALL A PROFESSIONAL REALTOR AT: -- FROM FORTUNE INTERNATIONAL REALTY |
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WHAT GUIDELINES ARE REQUIRED FOR A
MORTGAGE LOAN?
Mortgages are used by individuals and businesses
wishing to make large value purchase of real estate
without payment the entire value of the purchase up
front. Mortgages are also known as lien against property,
or claims on property. Mortgage is a legal agreement
that creates an interest in a real estate property between
borrower and the lender.
HOW TO UNDERSTAND THE HOME LOAN PROCESS?
Understand that in order to finance or refinance a loan
the lender requires documentation to verify and
substantiate your employment, credit and financial
situation to assure its investors
that you have the ability to repay the MONEY
HOME REFINANCING: 10 GREAT REASONS TO
REFINANCE A PROPERTY. NOW IT'S THE BEST TIME
FOR REFINANCING, THE INTEREST RATE IS VERY
LOW.
MORTGAGE LOAN MODIFICATION PROGRAMS; AN
ALTERNATIVE TO REDUCE MONTHLY MORTGAGE
PAYMENT, TO AVOID FORECLOSURE, TO SAVE
YOUR CREDIT RATING, TO SAVE YOUR PROPERTY.
REVERSE MORTGAGE
NO MORTGAGE PAYMENTS EVER AGAIN: IF YOU
OWNED A HOME AS YOUR PERSONAL RESIDENCE.
TO IMPROVE YOUR QUALITY OF LIFE AND LIVE WITH
NO STRESS!
IF YOU'RE 62 YEARS OF AGE OR OLDER, YOU CAN
ACHIEVE THIS, THROUGH A REVERSE MORTGAGE,
REGULATED BY THE U.S. GOVERNMENT.
FINANCING YOUR REAL ESTATE INVESTMENT;
BUYING YOUR FIRST, SECOND, AND OR THIRD
PROPERTY. HOW AND WHERE TO FIND MONEY?
CLICK RIGHT HERE!
FHA: F H A MORTGAGE LOANS, THE GOVERNMENT
IS THERE TO HELP YOU PURCHASE YOUR HOME.
PLEASE CONTACT US WE WILL SHOW YOU THE
WAY .
MORTGAGE LOAN PRE-QUALIFICATION, LOW
INTEREST RATES,
8 Reasons to Get Pre-Approved for a Home Loan
Learn why pre-approval is one of the smartest moves you
can make when shopping for a home
Subprime Mortgage
 A type of mortgage that is normally made out to
borrowers with lower credit ratings. As a result of the
borrower's lowered credit rating, a conventional
mortgage is not offered because the lender views the
borrower as having a larger-than-average risk of
defaulting on the loan.
FINANCING YOUR REAL ESTATE INVESTMENT;
BUYING YOUR FIRST, SECOND, AND OR THIRD
PROPERTY. HOW AND WHERE TO FIND MONEY?
CLICK RIGHT HERE!
RENTAL PROPERTY / COMMERCIAL REAL ESTATE /
COMMERCIAL LEASE Tips for Making Solid Business
Agreements and Contracts
MORTGAGE LOAN?
Mortgages are used by individuals and businesses
wishing to make large value purchase of real estate
without payment the entire value of the purchase up
front. Mortgages are also known as lien against property,
or claims on property. Mortgage is a legal agreement
that creates an interest in a real estate property between
borrower and the lender.
HOW TO UNDERSTAND THE HOME LOAN PROCESS?
Understand that in order to finance or refinance a loan
the lender requires documentation to verify and
substantiate your employment, credit and financial
situation to assure its investors
that you have the ability to repay the MONEY
HOME REFINANCING: 10 GREAT REASONS TO
REFINANCE A PROPERTY. NOW IT'S THE BEST TIME
FOR REFINANCING, THE INTEREST RATE IS VERY
LOW.
MORTGAGE LOAN MODIFICATION PROGRAMS; AN
ALTERNATIVE TO REDUCE MONTHLY MORTGAGE
PAYMENT, TO AVOID FORECLOSURE, TO SAVE
YOUR CREDIT RATING, TO SAVE YOUR PROPERTY.
REVERSE MORTGAGE
NO MORTGAGE PAYMENTS EVER AGAIN: IF YOU
OWNED A HOME AS YOUR PERSONAL RESIDENCE.
TO IMPROVE YOUR QUALITY OF LIFE AND LIVE WITH
NO STRESS!
IF YOU'RE 62 YEARS OF AGE OR OLDER, YOU CAN
ACHIEVE THIS, THROUGH A REVERSE MORTGAGE,
REGULATED BY THE U.S. GOVERNMENT.
FINANCING YOUR REAL ESTATE INVESTMENT;
BUYING YOUR FIRST, SECOND, AND OR THIRD
PROPERTY. HOW AND WHERE TO FIND MONEY?
CLICK RIGHT HERE!
FHA: F H A MORTGAGE LOANS, THE GOVERNMENT
IS THERE TO HELP YOU PURCHASE YOUR HOME.
PLEASE CONTACT US WE WILL SHOW YOU THE
WAY .
MORTGAGE LOAN PRE-QUALIFICATION, LOW
INTEREST RATES,
8 Reasons to Get Pre-Approved for a Home Loan
Learn why pre-approval is one of the smartest moves you
can make when shopping for a home
Subprime Mortgage
 A type of mortgage that is normally made out to
borrowers with lower credit ratings. As a result of the
borrower's lowered credit rating, a conventional
mortgage is not offered because the lender views the
borrower as having a larger-than-average risk of
defaulting on the loan.
FINANCING YOUR REAL ESTATE INVESTMENT;
BUYING YOUR FIRST, SECOND, AND OR THIRD
PROPERTY. HOW AND WHERE TO FIND MONEY?
CLICK RIGHT HERE!
RENTAL PROPERTY / COMMERCIAL REAL ESTATE /
COMMERCIAL LEASE Tips for Making Solid Business
Agreements and Contracts
BUY ALL YOU WANT RIGHT HERE; THE BEST QUALITY PRODUCTS FROM THE
WORLD GREATEST COMPANIES AT
DISCOUNT PRICE. BARGAIN, BARGAIN! --- THE SAFEST WEBSITE TO VISIT! CLICK
HERE
WORLD GREATEST COMPANIES AT
DISCOUNT PRICE. BARGAIN, BARGAIN! --- THE SAFEST WEBSITE TO VISIT! CLICK
HERE
Benefits of an FHA-Insured Loan
If one or more of the following situations apply, then an
FHA-insured loan may be right for you:
You're a first-time home-buyer.
You don't have a lot of money to put down on a house.
You want to keep your monthly payments as low as possible.
You're worried about your monthly payments going up.
You're worried about qualifying for a loan.
You don't have perfect credit.
You're worried about what will happen if you fall behind on your
payments.
FHA-insured mortgages offer many benefits and protections that
you won't find in other loans including:
Lower cost:
FHA-insured loans have competitive interest rates because the
Federal government insures the loans for lenders. Always
compare an FHA-insured loan with other loan types.
Smaller downpayment:
FHA-insured loans have a low 3.5% down-payment and the money
can come from a family member, employer or charitable
organization as a gift. Other loan programs don't allow this.
Easier qualification:
Because FHA insures your mortgage, lenders may be more willing
to give you loan terms that make it easier for you to qualify.
Less than perfect credit:
You don't have to have perfect credit to get an FHA-insured
mortgage. In fact, even if you have had credit problems, such as a
bankruptcy, it's easier for you to qualify for an FHA-insured loan
than a conventional loan.
More protection to keep your home:
The FHA has been around since 1934 and will continue to be here
to protect you. Should you encounter hard times after buying your
home, the FHA has many options to help you keep your home and
avoid foreclosure.
The FHA does not give money to people for a home and it does not
set the interest rates on mortgages it insures. FHA insures loans
for lenders against defaults. For the best interest rate and terms on
a mortgage, you should
If one or more of the following situations apply, then an
FHA-insured loan may be right for you:
You're a first-time home-buyer.
You don't have a lot of money to put down on a house.
You want to keep your monthly payments as low as possible.
You're worried about your monthly payments going up.
You're worried about qualifying for a loan.
You don't have perfect credit.
You're worried about what will happen if you fall behind on your
payments.
FHA-insured mortgages offer many benefits and protections that
you won't find in other loans including:
Lower cost:
FHA-insured loans have competitive interest rates because the
Federal government insures the loans for lenders. Always
compare an FHA-insured loan with other loan types.
Smaller downpayment:
FHA-insured loans have a low 3.5% down-payment and the money
can come from a family member, employer or charitable
organization as a gift. Other loan programs don't allow this.
Easier qualification:
Because FHA insures your mortgage, lenders may be more willing
to give you loan terms that make it easier for you to qualify.
Less than perfect credit:
You don't have to have perfect credit to get an FHA-insured
mortgage. In fact, even if you have had credit problems, such as a
bankruptcy, it's easier for you to qualify for an FHA-insured loan
than a conventional loan.
More protection to keep your home:
The FHA has been around since 1934 and will continue to be here
to protect you. Should you encounter hard times after buying your
home, the FHA has many options to help you keep your home and
avoid foreclosure.
The FHA does not give money to people for a home and it does not
set the interest rates on mortgages it insures. FHA insures loans
for lenders against defaults. For the best interest rate and terms on
a mortgage, you should
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ATTENTION, ATTENTION!
IMPORTANT INFORMATION ABOUT THE UNITED
STATES FIVE [5] BIGGEST FINANCIAL
INSTITUTIONS...
Bank of America Financial Services
Wells Fargo Financial Services
PNC-National City Mortgage Financial Services
Citibank,Citifinancial, Citimortgage, Citigroup
JPMorgan-Chase Financial Services
How & where to find money to invest in real
estate? & How to make the Bank say, "Yes
You're Approved"
Learn here the most effective ways to get the
best loan rates, and the best terms
IMPORTANT INFORMATION ABOUT THE UNITED
STATES FIVE [5] BIGGEST FINANCIAL
INSTITUTIONS...
Bank of America Financial Services
Wells Fargo Financial Services
PNC-National City Mortgage Financial Services
Citibank,Citifinancial, Citimortgage, Citigroup
JPMorgan-Chase Financial Services
How & where to find money to invest in real
estate? & How to make the Bank say, "Yes
You're Approved"
Learn here the most effective ways to get the
best loan rates, and the best terms
ATTENTION,
ATTENTION!
IMPORTANT INFORMATION
ABOUT THE UNITED STATES
FIVE [5] BIGGEST FINANCIAL
INSTITUTIONS...
Bank of America Financial
Services
Wells Fargo Financial Services
PNC-National City Mortgage
Financial Services
Citibank,Citifinancial,
Citimortgage, Citigroup
JPMorgan-Chase Financial
Services
How & where to find money to
invest in real estate? & How to
make the Bank say, "Yes You're
Approved"
Learn here the most effective
ways to get the best loan rates,
and the best terms
ATTENTION!
IMPORTANT INFORMATION
ABOUT THE UNITED STATES
FIVE [5] BIGGEST FINANCIAL
INSTITUTIONS...
Bank of America Financial
Services
Wells Fargo Financial Services
PNC-National City Mortgage
Financial Services
Citibank,Citifinancial,
Citimortgage, Citigroup
JPMorgan-Chase Financial
Services
How & where to find money to
invest in real estate? & How to
make the Bank say, "Yes You're
Approved"
Learn here the most effective
ways to get the best loan rates,
and the best terms
 | |  | |  | |  | |  |
WELCOME TO :
KNOWLEDGEFINANCIAL.COM
KNOWLEDGEFINANCIAL.COM
FHA MORTGAGE LOAN PROGRAMS
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FHA Mortgages
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FEDERAL HOUSING ADMINISTRATION LOANS - FHA
The FHA, or Federal Housing Administration, provides mortgage insurance on loans made by FHA-approved
lenders. FHA insures these loans on single family and multi-family homes in the United States and its territories. It is
the largest insurer of residential mortgages in the world, insuring tens of millions of
properties since 1934 when it was created.
An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA).
Nowadays, 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. The borrower’s
credit score can be between 500 – 579 if a 10% down payment is made. It’s important
to remember though, that the lower the credit score, the higher the interest borrowers
will receive.
The FHA program was created in response to the rash of foreclosures and defaults that
happened in 1930s; to provide mortgage lenders with adequate insurance; and to help
stimulate the housing market by making loans accessible and affordable for people with
less than stellar credit or a low down payment. Essentially, the federal government insures
loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on
their mortgage payments.
Low Down Payments and Less Strict Credit Score Requirements
Typically an FHA loan is one of the easiest types of mortgage loans to qualify for because it requires a low down
payment and you can have less-than-perfect credit. For FHA loans, down payment of 3.5 percent is required for
maximum financing. Borrowers with credit scores as low as 550 can qualify for an FHA loan.
Another advantage of an FHA loan is that it can be assumable, which means if you want to sell your home, the buyer
can “assume” the loan you have. People who have low or bad credit, have undergone a bankruptcy or have been
foreclosed upon may be able to still qualify for an FHA loan.
Mortgage Insurance is Required for an FHA Loan
You knew there had to be a catch, and here it is: Because an FHA loan does not have the strict standards of a
conventional loan, it requires two kinds of mortgage insurance premiums: one is paid in full upfront -– or, it can be
financed into the mortgage –- and the other is a monthly payment. Also, FHA loans require that the house meet
certain conditions and must be appraised by an FHA-approved appraiser.
Upfront mortgage insurance premium (UFMIP) — this is a one-time upfront monthly premium payment, which means
borrowers will pay a premium of 1.75% of the home loan, regardless of their credit score. Example: $300,000 loan x
1.75% = $5,250.00
Annual MIP (charged monthly) — Called an annual premium, this is actually a monthly charge that will be figured into
your mortgage payment. The amount of the mortgage insurance premium is a percentage of the loan amount,
based on the borrower’s loan-to-value (LTV) ratio, loan size, and length of loan:
Loan Term LTV Ratio Annual Insurance Premium
30 years 95% or less 0.80%
30 years Over 95% 0.85%
For example, the annual premium on a $300,000 loan with term of 30 years and LTV less than 95 percent would be
$2,400: $300,000 x 0.80% = $2,400. To figure out the monthly payment, divide $2,400 by 12 months = $200. So,
the monthly insurance premium would be $200 per month.
How Long Do Borrowers Have to Pay FHA Mortgage Insurance?
The duration of your annual MIP will depend on the amortization term and LTV ratio on your loan origination date.
For loans with FHA case numbers assigned on or after June 3, 2013 borrowers will have to pay mortgage insurance
for the entire loan term if the LTV is greater than 90% at the time the loan was originated. If your LTV was 90% or
less, the borrower will pay mortgage insurance for the mortgage term or 11 years, whichever occurs first.
Term Loan-to-Value (LTV) Ratio Duration
15 years or less 78% or less 11 years
15 years or less 79-89% 11 years
15 years or less 90% or higher Full loan term
Over 15 years 78% or less 11 years
Over 15 years 79-89% 11 years
Over 15 years 90% or higher Full loan term
FHA Loan Requirements
The requirements for FHA loans are set by the Federal Housing Authority and include:
• Borrowers must have a steady employment history or worked for the same employer for the past two years.
• Borrowers must have a valid Social Security number, lawful residency in the U.S. and be of legal age to sign a
mortgage in your
state.
• Borrowers must pay a minimum down payment of 3.5 percent. The money can be gifted by a family member.
• New FHA loans are only available for primary residence occupancy.
• Borrowers must have a property appraisal from a FHA-approved appraiser.
• Borrowers’ front-end ratio (mortgage payment plus HOA fees, property taxes, mortgage insurance,
homeowners insurance) needs to be less than 31 percent of their gross income if you have a credit score lower than
620, and less than 46% with credit scores 620 or above.
• Borrowers’ back-end ratio (mortgage plus all your monthly debt, i.e., credit card payment, car payment, student
loans, etc.) needs to be less than 43 percent of their gross income if you have a credit score lower than 620, and
less than 57% with credit scores 620 or above.
• Borrowers must have a minimum credit score of 580 for maximum financing with a minimum down payment of 3.5
percent.
• At Bluecastle Lending, borrowers must have a minimum credit score of 550-579 for maximum LTV of 90 percent
with a minimum down payment of 10 percent.
• Typically borrowers must be two years out of bankruptcy. Exceptions can be made if you are out of bankruptcy for
more than one year if there were extenuating circumstances beyond your control that caused the bankruptcy and
you’ve managed your money in a responsible manner.
• Typically borrowers must be three years out of short sale or foreclosure. Exceptions can be made if there were
extenuating circumstances and you’ve improved your credit. If you were unable to sell your home because you had
to move to a new area, this does not qualify as an exception to the three-year foreclosure guideline.
• The property must meet certain minimum standards at appraisal. If the home you are purchasing does not meet
these standards and a seller will not agree to the required repairs, your only option is to pay for the required repairs
at closing (to be held in escrow until the repairs are complete).
FHA Loan Limits
The Federal Housing Authority sets maximum mortgage limits for FHA loans that vary by state and county. In
Broward, Dade and Palm Beach counties, you may be able to get financing for a loan size up to $345,000.00 with a
3.5 percent down payment. Conventional financing for loans that can be bought by Fannie Mae or Freddie Mac are
currently at $417,000 before it becomes a Jumbo loan.
How much are the Closing Costs on an FHA loan?
“I have read in several places on the web that it is possible to finance your closing costs into a FHA loan. However,
many of these sources are at least a couple of years old. Is this possible?”
Some of your FHA loan closing costs may be financed (like up front MIP), and some may--after being negotiated
between buyer and seller--be paid by the seller within the boundaries of the FHA loan program’s rules. The
borrower also has the option to pay some closing costs out of pocket, which in South Florida they typically are about
six percent of the gross selling price.
During the market recession when it was a buyer’s market, we used to get the seller to pay all of the closing costs.
Today in South Florida however, its a seller’s market and this could be very difficult to achieve. This is one of the
reasons we have the CCAP program.
FHA loan rules say there’s one thing a borrower cannot do with closing costs, regardless of how they are paid.
Closing costs can never be included as part of your minimum FHA loan down payment. Closing costs do NOT count
towards the minimum 3.5% down payment and are considered separate from the down payment. In Broward, Dade
and Palm Beach counties the typical cash a borrower needs to close on an FHA loan 30 year fixed is 9.5% of the
selling price.
How Do You Get an FHA loan?
The process is simple. You call Bluecastle Lending and speak with Alex Baglioni. He will ask you a few preliminary
questions to make sure you are likely to qualify for a loan before even pulling credit or getting any personal
information. Typical questions before filling out a loan application are:
• Do you know what your credit score is?
• How much money do you have to buy a house?
• What price range are you considering?
• Have you had any short sale, foreclosure, BK, judgments or liens?
• Are you employed or self employed?
• If self employed, have you filed your 2015 and 2014 taxes?
FHA Loan Interest Rates
Bluecastle Lending interest rates are amongst the lowest mortgage rates in the country, and your 30 year fixed rate
will depend on how good your credit score is. The lender contribution could be applied to bring your interest rate
down (substantially), or to pay for your closing costs (substantially). Adjustable rate mortgages are also available
through FHA however, unless you are planning on living on the property a very short period of time, we do not
recommend it. The rates today are very low.
The FHA, or Federal Housing Administration, provides mortgage insurance on loans made by FHA-approved
lenders. FHA insures these loans on single family and multi-family homes in the United States and its territories. It is
the largest insurer of residential mortgages in the world, insuring tens of millions of
properties since 1934 when it was created.
An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA).
Nowadays, 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. The borrower’s
credit score can be between 500 – 579 if a 10% down payment is made. It’s important
to remember though, that the lower the credit score, the higher the interest borrowers
will receive.
The FHA program was created in response to the rash of foreclosures and defaults that
happened in 1930s; to provide mortgage lenders with adequate insurance; and to help
stimulate the housing market by making loans accessible and affordable for people with
less than stellar credit or a low down payment. Essentially, the federal government insures
loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on
their mortgage payments.
Low Down Payments and Less Strict Credit Score Requirements
Typically an FHA loan is one of the easiest types of mortgage loans to qualify for because it requires a low down
payment and you can have less-than-perfect credit. For FHA loans, down payment of 3.5 percent is required for
maximum financing. Borrowers with credit scores as low as 550 can qualify for an FHA loan.
Another advantage of an FHA loan is that it can be assumable, which means if you want to sell your home, the buyer
can “assume” the loan you have. People who have low or bad credit, have undergone a bankruptcy or have been
foreclosed upon may be able to still qualify for an FHA loan.
Mortgage Insurance is Required for an FHA Loan
You knew there had to be a catch, and here it is: Because an FHA loan does not have the strict standards of a
conventional loan, it requires two kinds of mortgage insurance premiums: one is paid in full upfront -– or, it can be
financed into the mortgage –- and the other is a monthly payment. Also, FHA loans require that the house meet
certain conditions and must be appraised by an FHA-approved appraiser.
Upfront mortgage insurance premium (UFMIP) — this is a one-time upfront monthly premium payment, which means
borrowers will pay a premium of 1.75% of the home loan, regardless of their credit score. Example: $300,000 loan x
1.75% = $5,250.00
Annual MIP (charged monthly) — Called an annual premium, this is actually a monthly charge that will be figured into
your mortgage payment. The amount of the mortgage insurance premium is a percentage of the loan amount,
based on the borrower’s loan-to-value (LTV) ratio, loan size, and length of loan:
Loan Term LTV Ratio Annual Insurance Premium
30 years 95% or less 0.80%
30 years Over 95% 0.85%
For example, the annual premium on a $300,000 loan with term of 30 years and LTV less than 95 percent would be
$2,400: $300,000 x 0.80% = $2,400. To figure out the monthly payment, divide $2,400 by 12 months = $200. So,
the monthly insurance premium would be $200 per month.
How Long Do Borrowers Have to Pay FHA Mortgage Insurance?
The duration of your annual MIP will depend on the amortization term and LTV ratio on your loan origination date.
For loans with FHA case numbers assigned on or after June 3, 2013 borrowers will have to pay mortgage insurance
for the entire loan term if the LTV is greater than 90% at the time the loan was originated. If your LTV was 90% or
less, the borrower will pay mortgage insurance for the mortgage term or 11 years, whichever occurs first.
Term Loan-to-Value (LTV) Ratio Duration
15 years or less 78% or less 11 years
15 years or less 79-89% 11 years
15 years or less 90% or higher Full loan term
Over 15 years 78% or less 11 years
Over 15 years 79-89% 11 years
Over 15 years 90% or higher Full loan term
FHA Loan Requirements
The requirements for FHA loans are set by the Federal Housing Authority and include:
• Borrowers must have a steady employment history or worked for the same employer for the past two years.
• Borrowers must have a valid Social Security number, lawful residency in the U.S. and be of legal age to sign a
mortgage in your
state.
• Borrowers must pay a minimum down payment of 3.5 percent. The money can be gifted by a family member.
• New FHA loans are only available for primary residence occupancy.
• Borrowers must have a property appraisal from a FHA-approved appraiser.
• Borrowers’ front-end ratio (mortgage payment plus HOA fees, property taxes, mortgage insurance,
homeowners insurance) needs to be less than 31 percent of their gross income if you have a credit score lower than
620, and less than 46% with credit scores 620 or above.
• Borrowers’ back-end ratio (mortgage plus all your monthly debt, i.e., credit card payment, car payment, student
loans, etc.) needs to be less than 43 percent of their gross income if you have a credit score lower than 620, and
less than 57% with credit scores 620 or above.
• Borrowers must have a minimum credit score of 580 for maximum financing with a minimum down payment of 3.5
percent.
• At Bluecastle Lending, borrowers must have a minimum credit score of 550-579 for maximum LTV of 90 percent
with a minimum down payment of 10 percent.
• Typically borrowers must be two years out of bankruptcy. Exceptions can be made if you are out of bankruptcy for
more than one year if there were extenuating circumstances beyond your control that caused the bankruptcy and
you’ve managed your money in a responsible manner.
• Typically borrowers must be three years out of short sale or foreclosure. Exceptions can be made if there were
extenuating circumstances and you’ve improved your credit. If you were unable to sell your home because you had
to move to a new area, this does not qualify as an exception to the three-year foreclosure guideline.
• The property must meet certain minimum standards at appraisal. If the home you are purchasing does not meet
these standards and a seller will not agree to the required repairs, your only option is to pay for the required repairs
at closing (to be held in escrow until the repairs are complete).
FHA Loan Limits
The Federal Housing Authority sets maximum mortgage limits for FHA loans that vary by state and county. In
Broward, Dade and Palm Beach counties, you may be able to get financing for a loan size up to $345,000.00 with a
3.5 percent down payment. Conventional financing for loans that can be bought by Fannie Mae or Freddie Mac are
currently at $417,000 before it becomes a Jumbo loan.
How much are the Closing Costs on an FHA loan?
“I have read in several places on the web that it is possible to finance your closing costs into a FHA loan. However,
many of these sources are at least a couple of years old. Is this possible?”
Some of your FHA loan closing costs may be financed (like up front MIP), and some may--after being negotiated
between buyer and seller--be paid by the seller within the boundaries of the FHA loan program’s rules. The
borrower also has the option to pay some closing costs out of pocket, which in South Florida they typically are about
six percent of the gross selling price.
During the market recession when it was a buyer’s market, we used to get the seller to pay all of the closing costs.
Today in South Florida however, its a seller’s market and this could be very difficult to achieve. This is one of the
reasons we have the CCAP program.
FHA loan rules say there’s one thing a borrower cannot do with closing costs, regardless of how they are paid.
Closing costs can never be included as part of your minimum FHA loan down payment. Closing costs do NOT count
towards the minimum 3.5% down payment and are considered separate from the down payment. In Broward, Dade
and Palm Beach counties the typical cash a borrower needs to close on an FHA loan 30 year fixed is 9.5% of the
selling price.
How Do You Get an FHA loan?
The process is simple. You call Bluecastle Lending and speak with Alex Baglioni. He will ask you a few preliminary
questions to make sure you are likely to qualify for a loan before even pulling credit or getting any personal
information. Typical questions before filling out a loan application are:
• Do you know what your credit score is?
• How much money do you have to buy a house?
• What price range are you considering?
• Have you had any short sale, foreclosure, BK, judgments or liens?
• Are you employed or self employed?
• If self employed, have you filed your 2015 and 2014 taxes?
FHA Loan Interest Rates
Bluecastle Lending interest rates are amongst the lowest mortgage rates in the country, and your 30 year fixed rate
will depend on how good your credit score is. The lender contribution could be applied to bring your interest rate
down (substantially), or to pay for your closing costs (substantially). Adjustable rate mortgages are also available
through FHA however, unless you are planning on living on the property a very short period of time, we do not
recommend it. The rates today are very low.
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