FHA Loans

FHA loans have been around a long time. The Federal Housing Administration (FHA) was created in 1934. The Federal Government tries to encourage home ownership and FHA is one way they have tried to help more individuals buy homes.

For First time home buyers with little cash available, FHA is a great way to go. Also, buyers with lower credit scores can qualify easier under FHA. No matter your credit score, FHA gives everyone the same terms/interest rate on their mortgage. This can make the FHA program much better than a Conventional Mortgage for some individuals and families.

The FHA down payment required is 3.5%. The Funding fee is usually rolled into the mortgage. This helps lower the amount of cash needed to close an FHA loan verses other types of loan programs. Also, FHA allows up to 6% Seller Concessions to help cover closing costs.

FHA guidelines have changed over the years and become more appealing as a loan option for Buyers. With limited resources, FHA is a Great option to check out. Interest Rates are also quite often lower with FHA than the Conventional Option.

Much has been said about Mortgage Insurance. Let us just add that Mortgage Insurance is lower under the FHA Option as well. Mortgage Insurance is designed to provide Buyers the ability to Purchase a home and lower the risk to the Lender that makes Home Ownership possible. When comparing FHA programs verses similar Conventional programs, the FHA will have lower Mortgage Insurance cost which means the overall monthly payment with FHA will usually be lower. Again, a win for the FHA Buyer.

The Maximum Loan for an FHA Mortgage is based upon the location of the property financed. In Utah that starts at $498,257.00 and goes up $1,149,825.00 for High Cost Counties. Each county loan value is determined by the cost of living and income normal for the specific county.