FHA loans are an attractive option, especially for first-time homeowners, because they require a small down payment, allow for lower credit scores and higher debt ratios, and are insured by the Federal Housing Administration (FHA). Basically, 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. The borrower can be approved with 3.5% down compared to a higher percentage that is required on some other loan programs.
What is an FHA Loan?
FHA loans are mortgage loans offered by a government sponsored lender. An FHA mortgage may have either a fixed or adjustable rate with dollar amount limits. We provide FHA loans in Portland, Multnomah County, or most locations in Oregon. Contact Ron from Plum Tree Mortgage for more information at (503) 525-7888.
Why should I use an FHA Loan?
FHA loans may provide better interest rates than conventional mortgage loans. Qualified borrowers will be determined by credit history, debt to income ratio, and income, and possibly other factors. FHA loans provide different underwriting flexibility than conventional loans but may have higher fees and longer time to complete the loan transaction.
FHA Loan Mortgage Insurance
Mortgage insurance is required for all FHA loans. As with a conventional loan, mortgage insurance is paid by the borrower as a monthly payment, plus a one-time upfront payment that can be added to the loan amount or paid through closing of the transaction. Credit scores, loan to value ratio and other factors may determine the amount of the mortgage insurance.
FHA Loan Requirements
Lenders have several requirements for successful underwriting of FHA loans. These include sufficient borrower income, assets, and credit scores. Property condition and liens, property function, location, construction method, employment and credit history are some others. While there may be flexibility with FHA loan requirements, it is important to consider all contributing loan factors together before a loan is submitted to underwriting. Working with an experienced qualified loan officer who prescreens borrowers before pre-approving is an important step to meeting FHA loan requirements. Ron from Plum Tree Mortgage will communicate with you before your loan is submitted to avoid loan delays later in the process.
Work with a Qualified Mortgage Lender
Ron Burian, Senior Mortgage Broker from Plum Tree Mortgage, is committed to helping his clients with all of their FHA Loan needs in Portland, Multnomah County, or anywhere else in Oregon. If you are purchasing a property for the first time, have previous home-buying experience, or are looking to refinance your current FHA loan, Ron can help. Contact him today at (503) 525-7888 for any questions you may have on FHA Loans or how to get pre-approved!