Type of Kentucky FHA loans available

May 17

Posted by

FHA loans are government-backed, which protect lenders against defaults, making it possible to offer prospective borrowers lower interest rates. Keep in mind that the FHA doesn’t actually lend money to borrowers, nor does the agency set the interest rates on FHA loans, it simply insures them.

Because FHA loans are government-insured, they have easier credit qualifying guidelines than most lenders, as well as relatively low closing costs and down payment requirements.

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.

Types of FHA Loans

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.

FHA loans are available for both purchases and refinances, including cash out refinances. 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.

FHA loans can be either adjustable-rate mortgages or fixed-rate mortgages. If the interest rate is adjustable, it will be based on the 1-Year Constant Maturity Treasury Index, which is the most widely used mortgage index.

FHA Mortgage Insurance Premium Costs

If the loan-to-value (LTV) is greater than 80%, mortgage insurance is required. FHA loans have an upfront mortgage insurance premium equal to 1% of the loan amount. This is typically bundled into the loan amount and paid throughout the life of the loan.

You must also pay an annual mortgage insurance premium if you take out an FHA loan.

Beginning October 4, 2010, if the loan-to-value is less than or equal to 95%, you will have to pay an annual mortgage insurance premium of 0.85% of the loan amount.  For FHA loans with an LTV above 95%, the annual insurance premium is 0.90%.

FHA Credit Score Requirements

Borrowers with credit scores of 580 and above are eligible for maximum financing, or just 3.5 percent down.

If your credit score is between 500 and 579, your FHA loan is limited to 90 percent loan-to-value (LTV), meaning you must put down 10%.

If your credit score is below 500, you are not eligible for an FHA loan.

The FHA, like any other bank or mortgage lender, has guidelines that need to be met, but generally makes it easy for potential homeowners to qualify for a loan.

Since the mortgage crisis struck, FHA loans have become increasingly popular, essentially replacing subprime lending, largely because of their relatively easy underwriting requirements and government guarantee.

But make sure you compare FHA loans with conventional loans as well. There will be cases when the benefit of one outweighs the other.

FHA loans are not guaranteed to be a better deal than other mortgages, so take the time to shop around. And watch out for unscrupulous FHA-qualified lenders who may attempt to misinform you.

Related articles

About Louisville Kentucky Mortgage

As a life-long Kentucky resident, I have helped over 589 families buy or refinance their home over the last 13 years. You can trust me for your next mortgage loan. I deliver on what I say and I will give you honest, up-front personal attention you deserve for your home loan. I have several advantages over the big- mega banks in town. First, I can shop your loan thru different mortgage companies across the country to get you the best deal out there, whereas most banks will offer offer you there one and only deal. I have access to over 15 different mortgage companies to broker your loan thru. My rates and fees are just as good or better than local banks and you will not get lost in the shuffle like most borrowers do at the mega banks; your just not a number at our company, you are a person and we will treat you like one throughout the entire process. Free pre-approvals within 2 hours and get your loan closed within 15 days. Give us a try or let us compare what you have now. Call me locally at 502-905-3708; this is my personal cell phone and I carry it on me at all times. Free credit reports and approvals. Stop by and see my at 107 South Hurstbourne Pky Louisville Ky 40222- or email me at kentuckyloan@gmail.com nmls# 57916

Posted on May 17, 2011, in FHA Guidelines and tagged , , , , , , , , , , , , . Bookmark the permalink. 16 Comments.

  1. Current Refinance Rates | June 9, 2011 at 5:11 am

    Being a new blogger, I would like to tell you that you have given me much knowledge about it. Thanks for everything.

    Reply
    • Louisville Kentucky Mortgage | June 11, 2011 at 10:29 pm

      Current Louisville Kentucky Mortgage Rates Today 06/11/2011

      Current Louisville Kentucky Mortgage Rates Today 06/11/2011

      Current Louisville Kentucky Mortgage Rates for today
      Mortgage Product Mortgage Rates (APR)

      15 Year Fixed Conventional 3.750% 4.135% apr
      30 Year Fixed Conventional 4.375% 4.834% apr
      30 Year Fixed Kentucky FHA 4.250% 5.275% apr
      30 Year Fixed Kentucky USDA 4.625% 5.288% apr
      30 year Fixed Kentucky VA 4.250% 5.189% apr
      30 year Fixed KHC 4.500% 5.377% apr

      Louisville Kentucky Mortgage Rates are subject to qualifying criteria and Louisville Mortgage Rates can change without notice

      Free Credit Report and Pre qualifications available anytime.

      Key Financial Mortgage of KY is a licensed mortgage company in the state of Kentucky (NMLS#1800) Key Financial Mortgage of KY is not a part of, nor are we affiliated with, the VA, FHA/HUD, USDA. These entities are a government agency, not a lender. They simply insures the mortgages; they do not loan the money. Joel Lobb (NMLS#57916) is a licensed mortgage loan officer in the state of Kentucky.

      Current Louisville Kentucky Mortgage Rates are updated daily at this blog

      Reply
  2. mmabet | June 9, 2011 at 5:04 pm

    louisvillemortgageguide.com is amazing, bookmarked!

    mma betting

    Reply
  3. Louisville Kentucky Mortgage | May 25, 2011 at 2:30 am

    Type of Kentucky FHA loans available

    Reply
  4. Louisville Kentucky Mortgage | May 26, 2011 at 11:52 am

    I compare Kentucky Mortgage Rates daily to get you best rates in Ky

    Reply

  1. Pingback: Kentucky Private Mortgage Insurance or PMI | Louisville Ky Mortgage Rates

  2. Pingback: Kentucky FHA Mortgage Loans—updated Guidelines « Louisville Kentucky Mortgage Loans

  3. Pingback: Kentucky FHA Mortgage Insurance Premiums 2011 | Kentucky FHA Mortgage Loans

  4. Pingback: KHC’s First Mortgage Government Loan Products | Louisville Ky Mortgage Rates

  5. Pingback: Louisville Kentucky FHA Seller Contributions and Closing Costs « Kentucky FHA Mortgage Loans

  6. Pingback: Dealing with Mortgages in Kentucky | Louisville Ky Mortgage Rates

  7. Pingback: FHA Loans in louisville, kentucky « Kentucky FHA Mortgage Loans

  8. Pingback: Down Payment Assistance Program (DAP) Guidelines Kentucky Housing Corporation « Louisville Kentucky Mortgage Loans

  9. Pingback: Jefferson County, Louisville, KY – Fannie Mae REO Homes For Sale | Kentucky First Time Home Buyer Mortgage Loan

Leave a Reply

Fill in your details below or click an icon to log in:

Gravatar
WordPress.com Logo

You are commenting using your WordPress.com account. ( Log Out / Change )

Twitter picture

You are commenting using your Twitter account. ( Log Out / Change )

Facebook photo

You are commenting using your Facebook account. ( Log Out / Change )

Cancel

Connecting to %s

Follow

Get every new post delivered to your Inbox.