Borrow up to 96.5% of the value with a FHA Loan.
A growing number of home buyers are using government-insured FHA home loans because of the favorable terms that they offer, compared to other loan types. FHA Loans have become so popular in today’s lending climate because they can be much more accomodating than other mortgage loans. With an FHA Loan, your down payment can be as low as 3.5% of the purchase price, and closing costs can be bundled with the loan amount. In addition, the FHA has a variety of loan programs for first-time homebuyers, along with reverse mortgages for senior citizens, and has insured more than 34 million mortgages since 1934. Keep in mind, FHA Loans do contain specific credit, income and property criteria for a mortgage to get approved. Let a Mortgage Loan Specialist at Midland States Bank work with you to fit you for the best mortgage loan.
Benefits of a FHA Loan
Low down payment.
The minimum down payment for a FHA Loan is only 3.5% and allows money to come from family member, charity or even your employer.
If you have had past credit problems, even bankruptcy, you may still qualify because greater emphasis is put on your current employment.
Closing costs in loan.
To help those with limited available funds, closing costs may be included into the loan amount to reduce the money needed upfront.
No prepayment penalty.
If you pay off your loan early or choose to refinance, your FHA Loan will not be assessed any prepayment penalties.
Available for refinancing.
FHA loans are available for both purchases and refinances, but you can only hold one FHA Loan at a time.
Is an FHA Loan right for you?
Various types of FHA Loans are available.
There are several types of FHA Loans created to help your individual needs. These types of loans include Fixed Rate, Adjustable Rate, Energy Efficient Mortgages (to help homeowners significantly lower their monthly bills), Graduated Payment Mortgages (for homebuyers who expect their income to increase substantially over time) - to name a few.
Low down payment.
The minimum down payment is 3.5% and the FHA allows the money to come from a family member, charitable organization or even an employer. Most conventional loans require borrowers to prove they have has the down payment amount personally.
Those with credit problems, even a bankruptcy, may be able to qualify for an FHA loan. The FHA puts more emphasis on income, length of employment and job security than do lenders of conventional loans.
No prepayment penalty.
FHA Loans do not have prepayment penalties if you choose to pay off your loan early.
Loans for various types of housing.
FHA loans are not just for single-family homes and condos. FHA loans can be used to finance residential 1-4 unit properties, including condominiums, manufactured homes and mobile homes (provided it is on a permanent foundation), but you can hold only one FHA loan at any given time. There is also a special loan program for buying a fixer that includes amounts to make the needed repairs.
Closing costs can be included in loan.
FHA Loans are allowed to have closing costs included in the loan as long as the borrower qualifies for the higher amount. Most conventional loans require that closing costs be paid for at the closing and not be part of the amount loaned.
FHA loans require a Mortgage Insurance Premium (MIP), which is similar to the Private Mortgage Insurance charged in conventional loans with less than a 20 percent down payment. The FHA MIP requires paying 1.5 percent of the loan amount up front and .50 percent of the amount owed annually, but paid monthly. (i.e.: A $100,000 loan balance will cost $500 the first year or $41.67 per month).
The FHA has limits on the amount that can be borrowed because the program is designed for low- to moderate-income buyers. These limits are based on where the house is located. These limits can be changed at any time, so consult your Midland States Bank Mortgage Specialist for current limits in your area.
Must be owner-occupied.
An FHA loan requires the home, or one unit in a multi-family complex, be occupied by an owner. So, this program is not for investors looking to buy property to rent out.
Your trusted lending partner.
Most people will only buy a few homes in their life and each home purchase may be the largest financial decision they have made to date. So, it's understandable that you need to find an option that is right for your financial situation and the right expert to help you through the maze of home financing. That's were we come in. Whether you've purchased homes before or you have little to no experience in buying a home, we will make sure no question is left unanswered. We believe in doing the right thing, for the right reason – that means you will receive personalized service through each step of buying your dream home. We do this with a team of experienced mortgage lenders who understand the industry and will help you with what you need, what to expect and how to get in your home quickly and easily. After all, that's what we do - everyday.
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