What Are FHA Loans?Elite Financial offers an array of VA (Veterans Affairs) and FHA (Federal Housing Administration) loans in Thousand Oaks, CA. These unique government loans offer tremendous advantages over conventional financing. Some of these include:
- A smaller or no down payment
- Lower FICO credit score requirements or possibly no FICO score-related requirements
- More liberal qualifying criteria such as higher debt-to-income ratios and the source of the down payment (the entire down payment can be a gift)
Benefits of FHA Loans in Thousand Oaks, CAElite Financial offers FHA loans in Thousand Oaks for first-time buyers with a down payment as little as only 0.5%. This loan is available for those who have not owned a home in the past three years. Certain income restrictions apply depending upon family size. These loan programs come with either a 3% down payment grant, which does not need to be repaid, or a 3% silent second. These funds are limited and subject to budgetary restrictions of the State of California. Click here to find the FHA mortgage limit in your county.
Standard FHA loans are available with as little as a 3.5% down payment. A minimum FICO score of 580 is often required (or possibly no FICO score). There are other FHA loan programs that require a minimum FICO score of 550 with a 10% down payment. Our Thousand Oaks FHA loans offers a number of benefits for those who have experienced credit issues in the past. One of the most significant reasons to get an FHA loan is that it is assumable—that means when you sell your property, the buyer can assume the loan.
More specifically, assuming a loan is a type of financing agreement in which the outstanding mortgage and its terms can be transferred from the current owner to a buyer. By assuming the previous owner’s remaining debt, the buyer can avoid having to obtain his or her own mortgage.
If interest rates were ever to sky rocket again, having a low fixed rate assumable loan would be attractive to a prospective buyer and would most likely make the property easier to sell at a higher price.
How Do FHA Loans Work?FHA loans are government backed, which allows borrowers to get better interest rates when obtaining a mortgage. In order to be able to pay lenders in case of a loan default, the FHA charges borrowers a mortgage insurance premium of 1.75% of the loan upfront, as well as a monthly fee collected with each payment.
Another tremendous advantage of an FHA loan is the ability to refinance with very limited documentation (including no income or asset documentation or appraisal) should rates move lower. A refinance will most likely be granted if the borrower has made regular and on-time mortgage payments in the past 12 months and continues to use the property as their primary residence.
Most importantly, refinancing an FHA loan requires no out-of-pocket money and nothing needs to be added to the loan balance. Please note that loan limits, or the maximum loan amount allowed, varies and is based on the income statistics of the county in which the property resides. In addition, if for some reason the loan limits of that county became lower than your balance on the loan, a streamline refinance would allow you to refinance at a higher loan amount.
FHA Loan QualificationsQualifying for an FHA loan is easy. Since the loan is backed by the government there are lower qualifying guidelines for borrowers, as well as low closing costs and down payments. Here are some figures to keep in mind:
- Borrowers often must have a minimum FICO score of 580
- The down payment can be as low as 3.5% of the purchase price
- Gift funds can be used to cover 100% of the closing costs and down payment
Why Choose Elite Financial?Elite Financial has been providing mortgage-lending services to homebuyers, homebuilders, and real estate professionals in California for more than 25 years. Elite Financial offers a number of diverse home loan options with the most competitive rates in the business. Learn more about FHA loans in Thousand Oaks for first-time homebuyers from the U.S. Department of Housing and Urban Development.
For more information or to apply for an FHA Loan in Thousand Oaks, contact Elite Financial today.