fha loans

FHA Loans – Everything you Must Know

FHA loans are loans backed by the federal government. The guarantee they provide allows React Mortgage to offer flexible underwriting guidelines, enabling borrowers with even low credit scores to secure mortgage financing.

It’s the perfect alternative when you don’t qualify for a conventional loan.

Qualifying for an FHA Loan

Qualifying for a mortgage can feel overwhelming, but at React Mortgage, we make it easy to understand how to qualify and/or what you must fix to get qualified.

In a nutshell, FHA loans require:

• Minimum 580 credit score or 10% down payment with a credit score between 500 – 579
• Minimum 3.5% down payment with at least a 580 credit score
• Maximum 43% – 50% debt-to-income ratio (your total debts shouldn’t exceed 43% – 50% of your monthly income before taxes)
• Stable income and employment for the last 2 years
• Proof you’ll live in the property as your primary residence

Benefits of an FHA Loan

At React Mortgage, we are proud to offer our borrowers FHA loans with these benefits:

• Ability to use gift funds for your down payment
• Flexible credit score requirements, allowing even borrowers with recent credit struggles to qualify
• Flexible debt-to-income ratio guidelines, allowing borrowers with higher DTIs to qualify for a loan
• Competitive interest rates comparable with conventional loans
• Available on most housing types including single-family, townhomes, condos, 1-4 family units, and manufactured homes permanently affixed to the ground
• Affordable mortgage insurance payments

Types of FHA Loans Available at React Mortgage

At React Mortgage, we are proud to offer our borrowers a variety of FHA loan options. Whether you’re buying a home or refinancing a home you own, you have many options including:

• Purchase Loan

Most applicants can borrow up to 97.5% of the sales price of a home. FHA loans have flexible guidelines and allow buyers to accept help from the seller to pay closing costs or other costs incurred when buying a home.

• FHA Streamline Loan

If you already have an FHA loan but want to take advantage of current low interest rates, you may be eligible for the FHA Streamline loan. This rate/term refinance is available during the first 36 months of an existing FHA loan. You can refinance the loan with little verification required. There’s no appraisal or income verification required. If you made your last 12 months of payments on time, you may be a good candidate for this program.

• FHA Cash-Out Refinance

The FHA cash-out refinance allows you to tap into your home’s equity. The equity is the difference between the home’s value and your outstanding mortgage. If you have over 20% equity in the home, you can withdraw some of it with an FHA cash-out refinance to use for other purposes including home renovations, debt consolidation, or any other reason you need the cash.

Learn more about the FHA loan program at React Mortgage by getting pre-qualified or requesting a call back today!