With interest rates so low, everyone is looking to jump on board and buy a home or refinance. However, not everyone has 20% to put down on a new house. It’s tough to come up with already, and rising rent prices aren’t helping. Well, there are three letters that can help you out. You can buy a loan with an FHA Loan.
What’s an FHA Loan? An FHA loan is actually a mortgage loan backed by the Federal Housing Administration’s mortgage insurance. They are a federally assisted program that allows families to move into a home with minimal down payment. Right now, you can move into your home with a 3.5% down payment using FHA.
The loan program actually dates back to the Great Depression. It was initially created to provide banks with insurance as well as to help homeowners and new buyers during a time when the rates of foreclosures and loan defaults were increasing and people were being put out of their homes in record numbers.
FHA is now a way for a new homeowner to follow their dreams and buy their first home, while guaranteeing the loan for the bank. Essentially it’s an insurance policy that guarantees the loan. This encourages banks to loan money.
The Home Loan Expert team also uses FHA to help people refinance to lower rates. Close to half of the refinancing that we do is accomplished through FHA. The FHA Loan program allows you to borrow up to 97.5 percent of the value of the house as opposed to a maximum of 90-95% for a conventional loan.
FHA rates are also lower than traditional loans. It’s the same rate depending on credit score or amount or percent. A conventional loan has “adjusters” on the loan, changing the rates and percentages.
We actually underwrite FHA loans in house, as we are a Direct Endorsed FHA Lender. Most companies, particularly those that gave up their FHA endorsement status during the early 2000’s when they weren’t being used extensively, have issues becoming an approved FHA lender again, while we maintained our FHA status so that we could continue to underwrite and close FHA loans.
We also close more FHA loans than anyone else in the Midwest.
The FHA program is a great way to get the lowest interest rate on your mortgage and set yourself up for a low monthly payment on your dream home.
If you’re ready to take rising home rates and low interest rates and use them to your advantage, call us in St. Louis at (314) 781-9700, Chicago at (773) 770-4727, Indianapolis at (317) 550-1515 or Nashville at (615) 810-8555. You can always apply online at www.thehomeloanexpert.com, and we’re also open on Saturdays to better serve you. We work hard to make it easy on you. Nobody gets lower rates on better loans than The Home Loan Expert, Ryan Kelley, why go anywhere else?