Homebuyers in St. Johns & Duval County may want to consider getting a Federal Housing Authority (FHA) backed loan to finance your home. FHA loans are backed by the government, which makes them attractive to all the banks and lenders that process them. Consider this loan source if one or more of the following apply to you:
- You are a first-time buyer, or move up buyer that has limited savings for a down payment (currently, you can put as little as 3.5% down)
- You want to keep your monthly payments low and have a secure fixed interest rate.
- You don’t want any early pay off penalty.
- Credit flexibility not available on standard conventional loan types.
FHA Loan Advantages
An FHA loan offers the following five benefits to borrowers:
- Easier Pre Approval Requirements – Because FHA mortgages are insured by the government, the lender may be more willing to work with you on finding the loan type that works best for you
- Lower Rates- Again, rates may be more advantageous than other loans because the government insures the funds. FHA loans have some of the lowest interest rates available today.
- Stability- The FHA has been in existence for over 80 years, it will continue to be here to protect you.
- Protection- If you encounter tough financial times after buying your home, the FHA can provide a host of options to help keep you in your home.
- Refinance – Easy FHA Streamline Refinance options should interest rates ever go lower in the future.
They are some requirement both on you and the property you’re considering that you’ll want to be aware of.
FHA Borrower Requirements for Duval & St. Johns County
To see of you qualify for an FHA loan the following guidelines apply:
- Any bankruptcy must be 3 years old and the applicant must have demonstrated good credit for 2 consecutive years after the bankruptcy was filed
- A foreclosure has to be at least 4 years old
- 4 consecutive years of good credit must follow. Min 600 credit score.
- You need 2 years of stable income and
- You must be able to put down 3.5% toward the purchase price of the home. Down payment funds can come in the form of a gift from friends or family. Note: some locations of St. Johns County are eligible for the 100% USDA loan. Please learn more about the USDA loan benefits here.
- With FHA the applicant’s monthly mortgage payments must not exceed around 30% of their gross monthly income
In addition to borrower requirements, requirements exist for the home you’re considering buying. This include:
- Single family home
- 2 to 4 unit properties
- The property must be used as a primary place of residence – no vacation homes or investment homes. Ineligible structures include co-ops, boarding houses, commercial properties, mobile, manufactured homes, vacant land, lot loans.
- If the home seller has acquired the home within the last 90 days, it’s ineligible for an FHA loan.
FHA offers the following loan options
Fixed Rate Loans- Most FHA loans are fixed rate mortgages. With a fixed rate loan, your interest rate stays the same for the life of the loan. This means you know how much your monthly payment will be and can budget for it.
Adjustable Rate Loans- With an FHA adjustable rate mortgage (ARM), the initial rate and resulting payments are low. However, the rate may change over the life of the loan. The changes are capped at 1 to 2 percentage points per year and usually 5 or 6 percentage points from the beginning rate over the life of the loan. Because the initial rate and payments are low, you may be able to afford more house.
Purchase-Rehabilitation Loans- When you found a home you like that needs a lot of work you may want to consider an FHA purchase-203K rehab. This loan uses the projected amount (subject to limits) of the property after the work is completed. It includes the mortgage and the price of repairs. The advantage of this loan is that you have one mortgage but can complete the home repairs after you’ve bought the home.
Proud to serve home buyers across the U.S. in 2021 including Florida: Jacksonville, St. Augustine, Clay County, World Golf, Fruit Cove, Julington Creek, Palm Coast.
Have Questions? Please contact us at ph: 800-743-7556. Be sure to visit www.FhaMortgageSource.com for more information.