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JoAnn M. Drabble, Keller Williams ElitePhone: (508) 930-1711
Email: [email protected]

FHA Insured mortgages: Understanding the basics

by JoAnn M. Drabble 02/21/2024

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Backed by the Federal housing administration, FHA insured mortgages can be an excellent choice of financing for potential homeowners. These loans are insured by the government rather than a bank or other lending institution, and as such have slightly different requirements and processes.

How FHA loans work

An FHA loan has fixed rate terms with fixed interest rates. Flexible underwriting standards are meant to allow for homeowners who may otherwise not be able to afford private loan programs. Their debt-to-income ratio, credit score and other financial requirements also tend to be more flexible.

However, the borrower must purchase FHA mortgage insurance, which protects the lender against losses should the borrower default. As with almost all other mortgage lenders, mortgage insurance is required if your minimum payment is under 20%.

FHA loan limits

The maximum amount you can borrow with an FHA loan varies. Different states, counties and cities can affect the total amount you're able to borrow. This is because the money comes from a government budget set based on factors like income and population. Research the limits in your area while considering this financing option.

How to apply for an FHA loan

The first step in applying for a FHA loan is to choose a lender. There are many choices of reputable lenders offering FHA-backed mortgages for qualified borrowers. Once you choose your lender, you'll submit an application either online or directly with a loan officer.

Gather quotes from multiple lenders before deciding. Just like with traditional mortgages, shopping around for the best deal is a good idea. Before completing the application process, make sure you're getting the best possible rate for your mortgage.

To complete the application, you'll have to provide basic details about yourself and your property. You'll also need to give the lender supporting financial documents to verify things like savings, debt and income.

During this time, the lender will run a credit check to determine your eligibility. Typically, FHA mortgages require a score of at least 500. Your lender may consider multiple financial factors. However, it's important to show evidence of solid credit history to better your chances of approval.

Borrowers who qualify for FHA loans can experience the benefits of a government insured mortgage and better afford their dream home. If you're interested in obtaining a FHA loan, this information is sure to get you started. 

About the Author
Author

JoAnn M. Drabble

JoAnn Drabble prides herself in making a "personal investment in each client”. With over ten years of experience working as a paralegal for various law firms, JoAnn brings significant legal expertise to her work. She understands the ins and outs of the real estate business and follows through on her sales from start to finish. She is often praised for her attention to detail in all aspects of a sale.

Working as a full-time professional in the real estate industry for 26 years, JoAnn has continuously been a top sales producer. She attributes her successful sales’ results to the personal relationships that she forges with her clients. Her years of experience combined with her outgoing personality and compassionate nature enable her to understand both the stated and unspoken needs of clients who are buying and selling their homes. JoAnn stays current with changing market conditions and trends in order to provide exceptional service and ensure a timely sale.

Her perseverance and real estate market savvy help her achieve 100% client satisfaction. The relationships that JoAnn forms with clients often last long after the purchase or sale of a home. Her clients’ satisfaction is her top priority and drives her to consistently exceed her performance goals and expand her growing referral base.