FHA & FHA 203K Loans
FHA home loans have been helping people become homeowners since 1934. Some benefits of FHA mortgages are:
- Low down payments
- Low closing costs
- Easier credit qualifying
FHA Home Loans
Buying your first home?
FHA is the most popular first time home buyer program. The seller can credit the buyer up to 6 percent of the sales price towards closing costs & property taxes reducing the amount of funds you would need to close. The FHA mortgage program is available on 1 to 4 family homes and condos.
Want a fixer-upper? Take Advantage of the FHA 203k mortgage program.
The FHA 203K mortgage allows you to buy a home, fix it up, and include all costs in one loan. You can also refinance with the FHA 203k rehab home loan program and include money for home improvement. Noreast Mortgage has over 20 years of exprerience providing CT fha 203 loans.
CT FHA Overview
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 What does FHA have for you? Buying your first home? FHA might be just what you need. Available on 1 to 4 unit homes & condos. Want a fixer-upper? the costs in one loan. Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs - all in one loan. Financial help for seniors 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. Want to make your home more energy efficient? You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.
FHA mortgage allows a buyer to purchase a home with as little as 3.5% down. They tend to be more lenient on areas such as credit, funds to close and coborrowers.
Most loans use a method of analyzing credit called credit scoring in the underwriting process. Studies have demonstrated a direct relationship between low credit scores and higher mortgage delinquency rates. As a result many lenders have established minimum credit scores at which they will accept loans. Unfortunately, a lack of credit, old delinquencies or incorrect information on the credit report can cause a low credit score. FHA does not have specific credit score requirements. Although a high credit score may assist in getting the mortgage approved, a low score is not automatically cause for denial. If the credit scores are low, then it is up to the borrower to demonstrate his/her ability and willingness to pay the loan back. This allows the borrower to explain the circumstances surrounding the credit difficulties and have that explanation considered in the underwriting process.
The underwriter on an FHA loan will review the credit and payment history of a customer concentrating on the most recent 12 to 24 months. If the customer has had a good payment record over the past 12 to 24 months they can often get approved for a mortgage even when Conventional financing has turned them down. An experienced loan officer can help the customer clearly tell their story and will often make suggestions as to how to make the file more acceptable to FHA. Because of FHA's leniency, some borrowers with past credit problems elect to use FHA for loans when they have a substantial down payment rather than getting a higher interest rate conventional loan. FHA tends to be more flexible than Conventional financing in the money needed to purchase the home.
In an FHA mortgage the customer must put at least 3.5% of the sales price into the transaction. Some of this money may be used for down payment and the rest for closing costs . Keep in mind, however,that the total cost to close on an FHA is commonly over the 3.5%. With the down payment, closing costs, money to establish escrows for taxes and insurance plus interest to finish out the month of closing, the total costs can be closer to 6 or 8% of the sales price.
FHA allows the borrower to get the funds necessary to close from several sources. They include such areas as personal savings, gifts, grants, loans from retirement accounts and seller contributions.