Simple Tips and Facts For FHA Mortgage Loans

With the way things are in the world, it’s essential to get as much information and help you need in purchasing a home. As an American Citizen, there are opportunities and benefits available to you. For example, the FHA loan. An FHA-insured loan is a US Federal Housing Administration mortgage insurance backed by a mortgage loan provided by an FHA-approved lender. FHA mortgage insurance protects lenders against losses.

At the same time, it also offers you better opportunities. You have a chance to qualify for a mortgage with a lower credit score, a 3.5 percent down payment, and a cap on closing costs. It doesn’t get much better than that.

Getting All the FHA Facts

FHA-approved lenders are not the federal government. Therefore each lender has its specific rates, fees, and more so be sure to know all the facts:

• Which FHA loan is best for my needs?
• Is there a rate lock available, how long is it, and is there a fee?
• Are there any penalties or fees to be aware of?
• How long does it typically take to close?
• What are the upfront costs?

Know Your Credit Score

It’s essential to know your credit score when looking for the best FHA lender for you. Anytime that you are looking for a mortgage lender, you must know your credit score. This is your ticket to better rates no matter what type of loan you’re getting.

A low credit score likely means that your options will be limited. Although the hard cutoff for approval of an FHA loan is a credit score of 500, some lenders will refuse to work with you if your credit score is lower than 580. A credit score between 500 and 579 might require you to put down 10 percent instead of 3.5.

Know Your APR

The APR or annual percentage rate shows you, as a percentage, the yearly cost of a secured loan or mortgage. Don’t underestimate the impact APR has on your loan. There is a difference between the interest rate and an APR. Although most people assume they’re the same.

The APR gives you a better idea of how much you will be paying to take out a loan. Just like how most mortgage lenders have different rates and fees, the same goes for the APR. There’s no standardized FHA rate or fees, so lenders are free to set their rates and terms.

The Bottom Line

An FHA loan can be a great option so if you need help with any of your mortgage needs in Cape Coral, trust American Mortgage Solutions. We are proudly licensed in Cape Coral, Florida, Kentucky, Tennessee, Indiana, and Colorado and we can guide you through the process and assist you in choosing the ideal mortgage. We help homeowners in Kentucky you can give us a call at (502) 327-9770 or in Florida please call (239) 766-8344 to learn more!