The Federal Housing Administration’s (FHA) loans are the easiest type of real estate mortgage loan to qualify for. The Federal Housing Administration (FHA) guidelines for loan qualification are the most flexible of all mortgage loans and require less than 5% down payment.
FHA home loans are available for those who qualify. One of our professional lenders will be able to help you identify the benefits of an FHA adjustable rate mortgage and tell if its what you need to fit your financial lifestyle. You may use this FHA loan program for 1-4 unit homes, as well as condominiums, townhouses, and PUDs.
An FHA adjusted rate mortgages (ARM) has payments that increase or decrease on a regular schedule because they are dependent upon interest rate changes and other financial factors. They generally have lower initial interest rates and so the monthly payments can be lower. Adjustable rate mortgages may also allow the borrower to qualify for a higher loan amounts.
FHA does not offer an initial low rate like most other adjustable rate mortgages, therefore it will normally start at a slightly higher rate than most other adjustable loans. There are other benefits to balance this out however.
FHA adjustable mortgages are designed to keep the home owner from paying huge amounts and from large interest rate adjustments that are the norm with other more common loans.
The yearly interest can rise or decrease no more than 1% per year vs. 2% for a conventional loan.
and the lifetime cap of the FHA adjustable mortgage is no more than 5% over the initial start rate vs. 6% for a conventional loan. In other words a FHA can take 5 years before reaching its maximum rate vs. a conventional loan can cap in only 3 years.
FHA’s adjustable rate mortgage is based on the economic indicator index called the 1-Yr. T-Bill. One of our loan specialists will be able to predict the loans rate fluctuations using the formula for this particular interest rate. One other benefit of the FHA adjustable rate mortgage is that you can “streamline refinance” to a FHA fixed rate mortgage at anytime. Also, since you can qualify at the lower start rate, you can qualify for a larger loan amount and a higher sales price home also.
We have recently learned from news reports that the Federal Housing Administration has put in place an entire educational system to make sure that potential home buyers understand all their options and make the best possible-most educated decisions possible.