FHA Approvals by Sunbelt Appraisals Inc.

With less strict lending standards and lower down payment requirements, FHA loans are a popular choice with first-time mortgage borrowers. FHA loans are insured by the Federal Housing Administration and were created in response to the many foreclosures and defaults during the depression of the 1930s. If you qualify for an FHA loan, your down payment can be a little a 3.5% with a credit score of 580 or higher. If your credit score is 500-579, you will be required to make a 10% down payment.

Benefits of an FHA Loan

FHA loans are among the easiest types of mortgage loans to obtain because of the flexible credit requirements and low down payments. They are an ideal option for the many borrowers who cannot afford a 20% down payment, have less than stellar credit, or who would otherwise not be approved for private mortgage insurance. Another advantage of an FHA loan is that they are assumable, meaning that if you need to sell your home, a new buyer can “assume” your existing loan. Those who have fair to poor credit, have been through a bankruptcy, or a past foreclosure may still be able to qualify for an FHA loan.

Mortgage Insurance Requirements

The primary “catch” of an FHA loan is that they do require two types of mortgage premiums. One is usually paid upfront, in full, and the other can be financed into the mortgage as an additional monthly payment. This is because unlike traditional loans, FHA loans do not have the same strict standards. Any properties financed with an FHA loan must also pass an inspection and meet certain conditions.

The two additional payments are as follows:

Upfront Mortgage Insurance Premium (UFMIP) – This one-time charge monthly premium payment requires buyers to pay a premium of 1.75% the amount of the home loan independent of their credit score. It can either be paid upfront or rolled into the monthly payments.

Annual MIP (monthly) – This annual premium is a monthly charge that represents a percentage of your loan amount based on your loan-to-value ratio, loan size, and the length of the loan.

Other Requirements of an FHA Loan

In addition to the considerations discussed above, here are just a few other requirements to qualify for an FHA loan:

·         A valid Social Security Number, lawful U.S. residency and of legal age

·         Steady employment history or worked for the same employer for at least two years

·         Minimum down payment of 3.5% even if gifted by family member

·         Minimum credit score of 500-579

How to Get an FHA Loan

If you think you could benefit from an FHA Appraisal, contact Sunbelt Appraisals today. We proudly serve home buyers in Orange, Seminole, Lake, Osceola, Polk and West Volusia Counties. Our professional appraisers will work with you to determine the most accurate market value of your home.