FHA Home Loan

Additionally FHA loans, because they are backed by the U.S. government, does not require PMI. Typically a conventional loan with a lower down payment will require the borrower to get private mortgage insurance. This insurance protects the lender just in case the borrower defaults on the loan. The cost of PMI is added to the monthly payment until the amount of the loan reaches 20%.

What is required for an FHA Loan?

Many of the same documents are required for an FHA loan: employment history, appraisal, debt-to-income ratio. There are few additional stipulations that are attached to the FHA loan process. Buyers may have to bring 3.5% of the purchase price as a down payment or more if they have a credit score below 580. Plus FHA loans are only available for the borrower’s primary residence.

Each lender looks at individual applications and may ask for additional documentation or explanations. Credit requirements may also be lower for FHA loans, given other factors demonstrate that the borrower is able to manage their money responsibly. They are often able to work with buyers with a lower credit score or shorter credit history.

Have questions? Give Us a Call! One of our mortgage specialists would be happy to answer all of your questions.

**Nationwide Mortgage Bankers Inc. is not affiliated with or acting on behalf of or at the direction of FHA, VA, USDA or the Federal Government.