FHA,
or the Federal Housing Administration, was created by the U.S. Federal
Government to insure loans made by lenders on single family,
multi-family, and manufactured homes. While FHA does not make loans or
lending decisions, they do manage the mortgage insurance premiums paid
by borrowers on FHA insured properties. Only FHA approved lenders can
make loans insured by FHA.
How do I qualify for a home mortgage using the FHA program?
Qualifying for a home mortgage using the FHA loan program is traditionally much easier than the qualification process involved in a comparable conventional Freddie/Fannie loan or Sub-Prime loan product. The FHA mortgage programs offer excellent interest rates and high loan-to-value amounts.
What is the difference between a regular mortgage and an FHA Loan?
Aside from who establishes the underwriting parameters for the loan, the differences can involve the maximum loan amount, the types of programs available, and the loan being insured by the FHA. The biggest difference is that far more people will qualify for an FHA insured loan than will qualify for a comparable conventional mortgage. The program offers virtually the same rates of interest.
Do you have to improve your credit score to get a better rate with FHA?
No. Under FHA guidelines, underwriters cannot use a credit score as the basis for determining whether a borrower can be approved or denied an FHA loan.
What is the importance of credit when you apply for an FHA Loan?
The FHA loan program focuses on credit quality that is traditionally focused on the most recent 12 month period. Underwriters are not overly concerned with late payments that occurred 18, 24 or 36 months ago, though letters of explanation are required. What they are concerned with is whether the loan makes sense and whether you have addressed issues that created past credit problems.
If you have more questions or you would like to make an appointment to discuss your mortgage loan details, please contact us. You can also complete the Mini-Application and we'll contact you promptly. We look forward to hearing from you.
Michigan Home Finance 2840 E. Grand River Ave., Suite 5 East Lansing, MI 48823 Phone: 517-827-0493 Fax: 517-827-0345 Email: mikewatters@mhfloan.com
