The primary goal of the Federal Housing Administration (FHA) is to improve the housing market and protect mortgage lenders if a borrower was to default on their FHA loan. The FHA is one of the largest insurers of whole mortgages in the United States. Assurance Financial is proud to offer excellent rates and flexible financing options on Birmingham and Tuscaloosa FHA loans.
What can I use an FHA Loan for?
A Birmingham or Tuscaloosa FHA loan can be used for a number of different purposes including new home purchases, home refinancing on your existing mortgage, and streamline loans. Cash out refinance options are available to purchasers in need of capital to consolidate debt and or repair their home. Streamline refinance loans are available that can reduce interest on current Birmingham and Tuscaloosa FHA loans.
Is an FHA Loan right for me?
A Birmingham or Tuscaloosa FHA loan offers relaxed credit requirements and lower down payment options compared to other home loans. Buyers interested in purchasing a new home could potentially qualify for an FHA loan with a down payment of only 3.5%. If a borrower does not have adequate savings to cover the down payment, family members are able to gift the funds needed to close. FHA loans are very popular among first time home buyers in Birmingham and Tuscaloosa Alabama.
FHA Loan Requirements:
- Income Requirements: A debt to income ratio of 43% is generally required, although a higher debt to income ratio could be approved in unique circumstances.
- Down Payment: A down payment of 3.5% of the home price is generally the minimum down payment allowed.
- Credit Score: The minimum credit score required for the guidelines with Assurance Financial on an FHA loan is a middle score of 615.
- Property Requirements: All properties purchased through a Birmingham or Tuscaloosa FHA loan must meet certain safety and security requirements that are set forth by FHA.
Mortgage Insurance Premiums
There are 2 different mortgage insurance premiums with all Birmingham and Tuscaloosa FHA Loans. The first is an upfront premium of 1.75% of the base loan amount and the second is a monthly insurance premium of .85% and will be based on a number of factors like the loan to value ratio.
Working with a Qualified Lender
At Assurance Financial, we are committed to helping our clients with all of their Birmingham and Tuscaloosa Alabama home needs. If you are purchasing your very first home, or looking to refinance your current FHA loan at a lower rate, we can help. Contact me, Ransom Kelly (205-624-0484), today for any questions you have on any Birmingham or Tuscaloosa FHA loans.