In New Jersey, FHA loans are rapidly becoming the loan of choice due to tightening credit standards. FHA loans still offer the borrower a reasonable down payment of 3.5%. That issue is mortgage insurance. When you are approved on an FHA loan, your mortgage insurance is also automatically approved. Why would a PMI company deny coverage on a lender approved loan? Mortgage insurance allows a lender to accept loans with less than 20% equity. FHA's mortgage insurance differs because it is government sponsored and not held privately. Federal Housing Administration or FHA loans are fully government backed. Conventional loans are packaged into mortgage backed securities by Fannie Mae, Freddie Mac, and other privately held companies. FHA mortgages also allow for higher debt to income ratios.
Unlike subprime mortgage loans, which usually have widely varying interest rates that spike upwards in the fifth or sixth year of the term, FHA loans have fixed interest rates that, on average, are lower. Most of the traditional loans that are available for homes require borrowers to have a credit score that is 740 or higher while FHA loans can be approved even if someone has a credit score that is as low as 640. FHA loan qualifications state that an applicant must be able to show that they have at least a 2-year history of steady employment. One of the most significant requirements for an FHA loan is the minimum down payment of 3.5%. This money is required to secure the loan for the borrower. There is also mortgage insurance that must be paid when you accept one of the FHA loan packages. Read article about home loans and First time home buyer grant
Unlike subprime mortgage loans, which usually have widely varying interest rates that spike upwards in the fifth or sixth year of the term, FHA loans have fixed interest rates that, on average, are lower. Most of the traditional loans that are available for homes require borrowers to have a credit score that is 740 or higher while FHA loans can be approved even if someone has a credit score that is as low as 640. FHA loan qualifications state that an applicant must be able to show that they have at least a 2-year history of steady employment. One of the most significant requirements for an FHA loan is the minimum down payment of 3.5%. This money is required to secure the loan for the borrower. There is also mortgage insurance that must be paid when you accept one of the FHA loan packages. Read article about home loans and First time home buyer grant