The Ultimate Guide to FHA Approved Lenders

Bruno Simpson Last Updated Apr 03, 2018 (0) comment

FHA approved lenders

Are you in the process of buying a house? Whether you are a first-time homebuyer, hoping to refinance, or looking for your forever home, FHA approved lenders can help you no matter what stage of life you’re in.

Continue reading to learn more!

What exactly are FHA Approved Lenders?

The Federal Housing Authority (FHA) insures loans for consumers, however, it does not give loans directly to consumers. The loans are made through regular lenders and local and state mortgage companies.

Lenders must be approved by the FHA to give these kinds of loans. There are guidelines set forth by the FHA that the company must adhere to in order to join the list of FHA approved lenders.

FHA Loan Borrower Qualifications

FHA loans are the easiest loans to qualify for. The minimum requirements are a 500 credit score with a 10% down payment.

For those who do not have a lot of cash on hand, a 3.5% down payment is acceptable with a minimum credit score of 580.

Unfortunately, buyers with lower credit scores will have a higher interest rate and a higher monthly payment. You should try to get your credit in the best shape possible before applying for a mortgage.

FHA home loans are extremely popular among first-time homebuyers, with more than half of first-time homebuyers using the loan to buy a house.

This is mostly due to the flexible qualifying guidelines and low down payments. If you are a first-time homebuyer, you might qualify for down payment assistance or government grants as well. Search by state to find your local homebuying programs.

Additionally, borrowers must be 18 years old and have steady employment, with at least two years at the same company. An appraisal of the house must be done by an FHA approved appraiser and mortgage insurance is required.

As of 2018, the maximum loan limit for low-cost areas is $294,515. For high-cost areas, the max is $679,650.

If you already have a home and are looking to refinance your current mortgage, there are several different types of options available to you if your home is your primary residence. For some options, you must already have an FHA loan.

Where to Find an FHA Approved Lender

Due to their popularity, approved FHA lenders can be found relatively easy. Call around to your local banks and mortgage companies or use the HUD lender list search.

It is always best to shop around for the best rates and lowest fees associated with buying a mortgage. Costs can vary between lenders.

When searching for a company to do business with, have in mind what is most important to you. This could be having the lowest monthly payment possible, having a shorter term, or what kind of customer experience they provide.

Wrapping up…

Are you considering using an FHA loan to buy your home now that you’ve learned everything about FHA approved lenders and FHA loans?

FHA Loan Search is here to take the stress out of home buying and loan refinancing!

Fill out our form for a free mortgage quote to get started towards purchasing your perfect home.

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