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  • FHA Home Loan

    • An FHA home loan is one that is insured by the Federal Housing Administration.  They are ofter a good choice for first-time home buyers as the guidelines for income and debt are less stringent.  These loans were designed for low to moderate income borrowers and require lower minimum down-payments and credit scores than conventional loans.  With a score of at least 580, you could qualify for a down-payment of 3.5%.  You may still qualify for an FHA loan if your credit score falls between 500-579 if you have 10% to put down.

      Like a conventional/conforming loan, an FHA loan is made by a private lender.  However unlike those loans, and FHA loan is guaranteed by HUD.  This means that FHA if you default on the loan. You pay for this guarantee in the form of a mortgage insurance premium (MIP).

      This insurance is paid in two ways.  You will pay an Upfront Mortgage Insurance Premium at closing.  This is equal to 1.75% of the loan amount and we will let you roll that amount into your loan.  You will also pay what is called the Annual MIP.  This is a smaller percentage - generally 0.08% to 0.85% of the loan amount - and contrary to its name, the premium is paid monthly and not annually.  Depending on certain conditions, you will pay this premium for the life of the loan.  However, the amount of MIP that you pay monthly decreases over the life of the loan since the amount that you pay is a percentage of the principal which decreases with each payment.