FHA Home loan

The FHA mortgage loan is the most Popular First time home buyer and low down payment program available.  The reason behind it being so popular is the program flexibility with debt ratios (DTI) which is calculated by your gross qualifying income and how much you owe on credit cards and loans combined with much home you want to buy. While the FHA loan also allows for a higher DTI ratios it also allows for lower credit scores without the Mortgage insurance fee becoming a higher amount like it would with a conventional mortgage.

The FHA loan can be combined with the Washington State down payment assistance program or the Pierce County down payment program to allow for a zero down home loan for qualifying buyers.

The FHA loan is an insured loan backed by a Ginne Mae bond program made available with assistance through government programs.   FHA loans require a down payment of 3.5%  and does have an Up-front mortgage insurance off of 1.85% (based on amount after down payment) and a monthly mortgage insurance fee typically at .85% of the loan amount (divided into 12 months) .

FHA mortgage insurance used to be removed after a 5 year period and if your value or balance had dropped to 78% of the appraisal value, but FHA has removed that feature on most programs and now requires the mortgage insurance to last the life of the loan. There are some options to have it removed based on your down payment and loan term. 

Mortgage insurance is a policy that protects lenders against losses that result from defaults on home mortgages. FHA requirements include mortgage insurance primarily for borrowers making a down payment of less than 20 percent.

Contact Bruce McLaughlin today to find out how much you will qualify for and he will help you get started with your FHA Home Loan.

Bruce McLaughlin

NMLS 70081

Eagle Home Mortgage

BruceMcLaughlin@eaglehm.com

call 253-651-5755

 

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