First Time Home Buyers And Home Loan With Bad Credit

FHA insured mortgage loans are a great program for first time home buyers and for those who need a home loan with bad credit.  FHA insured mortgage loans make first time home buyers and those who need home loan with bad credit the dream of homeownership a reality.  To qualify for a 3.5% down payment FHA insured mortgage loan for first time home buyers and those seeking a home loan with bad credit,  the minimum credit score required is 580 FICO.  The Federal Housing Administration makes homeownership possible for those who have had prior bankruptcies, foreclosures, deed in lieu of foreclosures, and short sales as well as those who have had credit issues and still have unsatisfied collection accounts.  You can qualify for a mortgage loan approval with outstanding collection accounts as long as you have been timely for the past 12 months on your monthly credit obligations.

FHA Mortgage Insurance Premium: 30 Year Fixed Rate FHA Loans

If you are a home buyer seeking a FHA insured mortgage loan, a 3.5% down payment is required towards your home purchase.  You will also be charged a 1.75% upfront FHA mortgage insurance premium which can be rolled into the mortgage loan.  For 30 years fixed rate FHA insured mortgage loans, there is also a 1.35% annual FHA mortgage insurance premium that is paid monthly along with your mortgage payment.  The annual FHA mortgage insurance premium is 1.35% of your FHA mortgage balance and you need to pay this FHA mortgage insurance premium for the life of the FHA loan.  The only way you get out of paying the monthly FHA mortgage insurance premium is when you pay off your FHA insured mortgage loan.

FHA Mortgage Insurance Premium: 15 Year Fixed Rate FHA Loans

The Federal Housing Administration has a special FHA mortgage insurance premium reduction program where if you put a 10% down payment on a 15 year fixed rate FHA loan, your FHA mortgage insurance premium will greatly be reduced from the standard 1.35% of your mortgage balance amount to 0.45% of your mortgage balance amount.  This reduction of FHA mortgage insurance premium is a huge savings over the course of the FHA loan.  Also, another perk with a FHA 15 year fixed rate mortgage loan is that you can cancel the FHA mortgage insurance premium on the 11th year if and only if your FHA loan to value is at 78% or lower.

By Gustan Cho

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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