FHA Loans

Puyallup Home mortgage preapprovalAn FHA Home Loan is a Federal Housing Administration mortgage insurance backed mortgage loan which is provided by a FHA-approved lender. FHA insured loans are a type of federal assistance and have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford. To obtain mortgage insurance from the Federal Housing Administration, an Upfront mortgage insurance premium (UFMIP) equal to 1.75% of the base loan amount (after the 3.5% down payment) which is typically added to the loan amount. FHA also charges a monthly mortgage insurance premium typically set at .85% per year based on the loan balance.

How to obtain an FHA loan

FHA does not make loans. Rather, it insures loans made by private lenders (Such as Eagle Home Mortgage) . The first step in obtaining an FHA loan is to contact  your lender and verify they are an FHA approved lender, as most loan originators are. As each lender sets its own rates and terms, comparison shopping is important in this market.

FHA allows  homebuyers to put down as little as 3.5% and receive up to 6% towards closing costs. Specific FHA lender overlays may be tighter. For example very few lenders will allow a seller to contribute more than 3% toward allowable closing costs. If little or no credit exists for the applicants, the FHA will allow a blood relative, such as a parent or grandparent or uncle, to co-sign for the loan without requiring them to reside in the home with the first time homebuyer. This is called a Non-Owner-Occupied Co-Borrower. Depending on the state you reside in, you may receive a discount on your State Transfer Taxes at settlement. Again, the specific FHA lender’s underwriting guidelines will have their own standards. Very few lenders will fund FHA loans for buyers without a minimum 620 FICO score.

FHA loans are available with terms in 15 and 30 years fixed along with ARM (Adjustable Rate Mortgage) options.

Contact Bruce McLaughlin today to get pre-approved for an FHA loan or a comparison vs. a Conventional loan program and let’s see what is best for you and your family.

All page content by Bruce McLaughlin Eagle Home Mortgage 1029 East Main Puyallup WA 98372 NMLS 70081 253-651-5755 Contact me directly for any questions