Florida FHA Mortgage Guidance

FHA is a mortgage where private mortgage insurance is provided with federal funding. Most major mortgage companies offer the program. Although the program is most often utilized by new home buyers, it is not restricted to them. This blog provides Florida FHA Mortgage Guidance and pre-approval recommendations to help you determine if it is a mortgage that you should go with.

Advantages Of FHA Programs

There are many significant advantages of FHA programs. The minimum down payment for FHA loans is three and a half percent, which accommodates home buyers without a lot of savings. They also allow buyers to use gift money for the down payment and closing fees. An additional benefit is the simplified refinancing procedure. It enables people to refinance to a reduced interest rate without obtaining a new appraisal, which is helpful if loan rates and home values both fall. The loans may also be assumed, meaning that a new borrower can take over the loan at the fixed interest rate (if that person qualifies). This may be a big selling point if interest rates are on the rise. Lastly, FHA does not discriminate against FICO rankings. Although buyers must still maintain satisfactory credit, less than average amounts will not lead to higher interest rates.

Disadvantages Of FHA Financing

There are disadvantages of FHA financing to note. FHA mortgage insurance (MI) is typically higher than a conventional mortgage. There is an up-front fee at closing and a recurring fee due each month until the mortgage is paid off. For condo purchases, the complex must meet particular requirements such as minimum reserve funds and sufficient owner occupancy rates. Converted buildings may be unlikely to get approved. Single family homes must also satisfy specific safety requirements.

FHA Pre-approval Recommendations

Before applying for a pre-approval, check your credit score and fix any problems. Also track needed financial documentation such as bank accounts, tax forms from previous years, recent pay stubs, and investment statements. Banks will routinely ask for these items. Ask a mortgage consultant to receive estimated monthly payments (based on a specific purchase price and your financial qualifications) and closing fees before getting too far in the process.