FHA is a loan program where mortgage insurance is subsidized with federal funding. Most major mortgage companies offer it. Although it is often used by first time buyers, it is not restricted to them. This blog provides NH FHA Loan Program Information and pre-approval guidance to help you determine whether it is a loan program that you should consider.

Benefits Of FHA Programs

There are many important benefits of FHA programs. The lowest down payment for FHA loans is 3 percent, which aids home buyers without a larger down payment. They also allow buyers to use gift money for the down payment and closing fees. Another benefit is the simplified refinancing process. It allows a refinance to a lower interest rate without needing an updated appraisal, which is helpful if loan rates and property values both decline. The loans may also be assumed, meaning that it may be transferred to a new owner (if they qualify). This could help when interest rates rise significantly. Finally, FHA does not penalize buyers for credit rankings. Although home buyers must still maintain a minimum score, less than average amounts will not lead to higher interest rates.

Downsides Of FHA Financing

There are downsides of FHA financing to keep in mind. FHA mortgage insurance (MI) is often higher than a conventional loan. There is an up-front fee at closing and a repeating amount due with each payment for the entire duration of the mortgage. For condo units, the complex must satisfy particular requirements such as minimum reserves and certain owner occupancy percentages. Converted buildings may be unlikely to get approved. Single family homes must also meet certain safety rules.

FHA Pre-approval Guidance

Before requesting a pre-approval, pull your credit score and address any problems. Also gather important financial forms such as bank accounts, tax forms from past years, current pay stubs, and investment account statements. Mortgage Professionals will normally request a copy of these items. Consult with a loan officer to receive estimated monthly payments (based on a particular purchase price and your credit qualifications) and closing costs prior to advancing too far in the process.

NH FHA Loan Program Information

FHA makes a home purchase possible for certain buyers who might otherwise not be able to get a mortgage. It may also make refinancing or selling a property easier in the future. However, it does have higher costs and property criteria, so not every buyer can or may wish to use an FHA mortgage. Contact an FHA mortgage expert to fully understand this program.