Get the Answers to Your Questions About FHA Loans
Here are most asked questions about FHA home loans.
Here is a compilation of the most frequently asked questions about FHA mortgages.
Q. Can closing costs be included in a FHA loan?
A. Unfortunately, closing costs cannot be included in an FHA home
loan. Thee initial mortgage insurance can be included in the FHA
loan amount.
Q. Can an FHA loan be refinanced?
A. Yes, FHA loans can br refinanced. In fact, there are multiple
refinance options available, including a no income and no appraisal
streamline refinance. See Streamline refinance
Q. Can I buy a multifamily home with a FHA loan?
A. HUD/FHA will finance up to 4 units. One of the units must be
occupied by the home buyer. The FHA loan program prohibits
investors.
Q. Can I get an FHA loan on a second home?
A. Technically, you can obtain a second home with an FHA home loan.
The FHA loan can not be used to finance a vacation home. See 2 FHA loans
Q. Can I use unemployment income to qualify for a mortgage?
A. If you're a seasonal worker who receives unemployment benefits on
a regular basis during your off-season, an underwriter will probably
allow the unemployment income to be included in your mortgage
application, provided that you have been receiving the benefits for
at least two years.
Q. Can you get an FHA loan with bad credit?
A. This is a question that is often asked. First and foremost, what
is the nature of your poor credit? Late payments on credit cards,
defaulted government debt, or even a bankruptcy. The FHA loan
program allows home buyers with credit scores as low as 500 to
purchase a home, although a down payment of ten percent is
necessary. The down payment required is 3.5 percent for a credit
score of 580. Make an appointment to meet with a loan officer and
explain the reason(s) why your credit has become negative.
Q. Do FHA loans require an inspection?
A. No inspection is required for an FHA home loan. The FHA does
require an appraisal as a condition for the loan.
Q. Do FHA loans require mortgage insurance?
A. The FHA requires mortgage insurance. There is a premium that is
paid in cash at settlement or financed. There is also a monthly
insurance premium (MIP).
Q. Does the FHA loan cover closing costs?
A. The FHA does not cover closing costs. The closing costs can be
paid by the home seller up to 6% of the sales price (if agreed to),
a gift from an eligible donor, or a grant from an eligible
non-profit company.
Q. Does the FHA loan have a prepayment
penalty?
A. There are no prepayment penalties with FHA mortgages.
Q. Does mortgage insurance cover death
A. The mortgage insurance on an FHA mortgage is not life insurance
and does not cover death.
Q. FHA roster of appraisers
A. With this link, ou can find the
FHA roster of appraisers
Q. FHA requirements for handrails
A. The FHA no longer mandates the installation of handrails; it is
up to the appraiser to determine if railings are necessary to remove
a safety concern. Handrails should be built in line with local
regulations along open staircases and stairwells.
Q. How long do Chapter 7 bankruptcies last?
A. For up to ten years, a Chapter 7 bankruptcy will remain on your
credit report. Following a Chapter 7 bankruptcy, a waiting period of
up to three years may apply, prior to an FHA loan application. See
Bankruptcy Waiting Period
Q. What does FHA stands for?
A. FHA is an abbreviation for the Federal Housing
Administration. The FHA is a division of the Department of Housing
and Urban Development (HUD).
Conclusion
In conclusion, the FHA program offers many benefits to potential homeowners. By answering some of the most common questions about the program, we hope that you have a better understanding of how it works and whether or not it is right for you. If you are still unsure, be sure to consult with a qualified mortgage professional.