FHA Loans are back in the news after the federal government dropped the PMI rate by a half-point this January. It’s the perfect time to get in on an FHA loan RIGHT NOW. Interest rates are still low, and with the reduced PMI, people are saving hundreds of dollars every year. It’s free money, so you need to take it!
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. Currently, all that’s required to purchase a home is a 3.5% down payment. The program goes back to the Great Depression and was initially intended to both provide banks with insurance and help homeowners and new buyers when the rates of foreclosures and loan defaults were steadily increasing. FHA now works primarily for those that can’t afford a down payment, or won’t qualify for private mortgage insurance (PMI). Essentially it’s an insurance policy that guarantees the loan.
We also use FHA for refinancing. Half of the refinancing done now is through FHA. It 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.
So, our FHA loan bonafides aside, the 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. Call us today at (615) 810-8555 or apply online at www.thehomeloanexpert.com/nashville right now. Take advantage of the low rates and lowered PMI while they are still available. Remember, nobody makes it easier to get an FHA loan than The Home Loan Expert, Ryan Kelley.