Goals of Texas FHA Loans
The Primary goal of the Federal Housing Administration (FHA) is to improve the housing market and protect lenders if a borrower defaults on their mortgage payments. FHA is one of the largest insurers of mortgages in Texas. The Mortgage Guy is proud to offer flexible financing options and great rates in Pearland, Humble, and Tomball Texas FHA loans.
How Can FHA Loans be used?
A Texas FHA loan can be used for a number of purposes, including refinancing existing mortgage, purchasing a new home, special renovation projects, and even a reverse mortgage. Streamline refinance loans are available to reduce interest on your current mortgage loan.
How to Qualify for a Texas FHA Loan
Texas FHA loans offer relaxed credit requirements and lower down payment options making them easier to qualify for. Buyers can qualify for an FHA loan in Texas with a down payment of 3.5% of the purchase price, and a credit score of as low as 580 fico score. If the buyer does not have the down payment, family members can gift the money.
Since FHA loans are easier to qualify for they tend to be very popular with first time home buyers in Pearland, Humble and Tomball Texas.
Texas FHA Loan Requirements:
Income Requirements: A debt to income ratio of 43% is generally required.
Credit Score: A credit score of 580 is required.
Down Payment: A down payment of 3.5% is required.
Property Requirement: The property has to meet certain requirements set by the FHA.
Texas FHA Interest Rates:
FHA Interest rates tend to be lower than Conventional financing rates because the government is backing the mortgage insurance. FHA rates can be as much as 1/2 percent better than Conventional rates. Be aware that all mortgage insurance rates are risk related, and your rate could be higher or lower based on multiple risk factors.
Mortgage Insurance Premiums:
-Monthly – Fha Loans do require a monthly mortgage insurance premium. This premium is currently set at .85bps for all FHA Loans. This monthly amount has changed multiple times in the last 5 years based on the amount of claims that have been paid by FHA to investors based on defaults.
-Upfront – FHA Loans do require a mortgage insurance premium charge of 1.75% upfront. This premium is rolled into your loan amount. This upfront premium is one of the only things that is considered negative about the FHA Loan product. This premium makes sure the Federal Housing Authority insurance fund is within the boundaries that are set my Congress.
Working with a Qualified Lender
The Mortgage Guy is committed to helping his clients with all of their Texas FHA needs, especially those in Pearland, Humble, and Tomball Texas. Whether you are purchasing your very first home, or are looking to refinance your FHA loan at a lower rate, we can help. Contact the Mortgage Guy today with any questions you have on Texas FHA Loans or how to get pre-qualified!