The Many Advantages of an FHA Loan You Need to Know About
When is it a good idea to use an FHA loan? Hi, my name is Joe Weiser, and today I want to talk to you about the pros with FHA. Number one, you can do a streamline refinance with FHA. So let's say you did an FHA loan today, and you want to refinance it. After a few years, rates went down. You want to refinance.
You can do something that's called a streamline refinance, which is you can do a refinance without showing income documents without doing an appraisal on the house. It's a very easy process with FHA. You can do a streamline refinance and I don't ask you for anything, how much money you're making. This is number one.
Number two, FHA is assumable. What does assumable mean? When you take out a mortgage, let's say a conventional mortgage, you cannot transfer this mortgage over. Let's say you're selling the house in a few years from now, and there's this mortgage on the house, this loan on the house you need to pay it off. With FHA, you can transfer this loan to the person buying the house.
This means it's assumable. Let's say rates went up in these few years, the person buying the house can take over the loan with a low rate. So you can have an advantage when you're selling the house and you're getting them with very good loan with the house. So it's a big advantage with FHA.
And when is it needed? If your credit is not that good, they'll go down to the 500 credit. If someone wants to put down a low down payment, FHA is a very, very good program. You can put down three and a half percent. It doesn't matter if it's a single family or if it's a four unit, this is a big deal. There is something that's called a debt to income ratio, which is basically a calculation to see if you have enough income versus your expenses.
There's a ratio. They'll go higher, which means there are scenarios where conventional will not allow, you know, you will not be able to take conventional loan, but FHA will approve it. So the conventional is usually your debt can be about 45 to 50% of your income, they'll allow you to go up to 56-57%. So there's definitely a place for FHA there.
One more thing I can think about FHA, a mixed use properties when you have a store in the bottom and they have one or two residential homes on the second floor. This is called a mixed use property because it's mixed between residential and commercial. FHA has a very good product for a mixed use property also within three and a half percent down.
So these are all scenarios. I would look at FHA. FHA is a very good option that their waiting time, after a derogatory event, like a foreclosure or bankruptcy is also shorter than conventional financing. So there's definitely a big, big advantage with the FHA program.
And it helps a lot of people. So that's for now, with FHA. And there's a lot more, with FHA. And if you have any questions, different guidelines are different. It's a whole different animal, and I'm ready to answer questions. There's all the good loan officers here at Find My Way Home. We'll connect you with someone good that will be able to answer your questions.
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Joel Weiser NMLS # 1509389 Loan Officer 7016 Fort Hamilton Pkwy Brooklyn, NY 11228 (917) 539-7704 email@example.com
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