FHA loans are an attractive option, especially for first-time homeowners or buyers with less than perfect credit wanting a lower down payment because it is insured by the Federal Housing Administration (FHA) and typically offers lower interest rates than a conventional loan would. Primarily, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments. A borrower can be approved for FHA loans with as little as 3.5% down. Credit score requirements are also a little more lenient than other programs. Most lenders and banks require a minimum credit score of 620, but Bank of England Mortgage Troy may have options for you down to 580.
For these additional benefits, mortgage insurance is required on all FHA loans regardless of the down payment amount or equity. Loan limits are based on the county and are typically lower than conventional loan limits.
Benefits of FHA Loans
FHA loans are intended for borrowers with lower than average credit scores, and have good rates and flexibility with lower down payments, only 3.5% down in most cases. FHA loans are more advantageous to borrowers with less than perfect credit history also. The waiting period for a major derogatory event such as a foreclosure, short sale, or bankruptcy is shorter than other loan programs. Keep in mind, FHA loans are only available for purchase or refinance of a primary residence, not for vacation or investment homes. Homeowners with FHA loans may also have the option to streamline refinance the mortgage to a lower rate with NO Closing Costs and/or NO Appraisal a short period of obtaining the loan.
FHA Loan Limits
Different counties have different limits on how much you can borrow on FHA loans. The baseline limit on FHA loans was increased this year for most counties. For 2022, all counties in Michigan have a loan limit of $420,680 for one-unit homes. Some high-balance or high-cost counties have a higher limits on FHA loans up to $970,800. Those limits are also higher for multi-family homes (2-4 units). For more details, please visit HUD.gov or contact Alex Kandah and his team at Bank of England Mortgage Troy.
Get Pre-Approved for an FHA Loan
If you are looking to purchase or refinance a home in Troy, Michigan or anywhere in the United States and are interested in finding out more about options including FHA Loans, contact Alex Kandah - Bank of England Mortgage at (248) 633-8555, email@example.com, or simply fill out the form on this page for prompt, professional, honest guidance.