FHA loan rates must be understood to properly mean Federal Housing Authority’s (FHA) Mortgage Insurance Program. FHA loan rates does not mean that FHA grants loans and charges interest for such loans but rather it actually means that the FHA provides insurance to qualified lenders for the purpose of allowing lower income consumers to afford housing loans that are normally outside of their capacity to pay. The aim of this article is to aid first time home buyer loans and those who are looking to refinance their home understand qualify and maximize FHA home loan insurance.
FHA loan rates For First Time Buyers
First time buyers need to know the following FHA loan rates qualifications:
- Valid Social Security Number (SSN);
- Resident of the United States of America;
- Legal age in the state of residency for purposes of contracting and signing a FHA Loan Rates approved mortgage
Income Cap for FHA loan rates
As a general rule FHA loan rates does not require a minimum or a maximum income limit to qualify for government home loans. This applies for so long as the income of the applicant is enough to pay for the amount of the mortgage and is within the valid debt to income ratio. Generally this means a thirty percent (30%) debt to income ratio.
Guidelines to qualify for FHA loan rates approval
After tackling the minimum requirements for FHA loan rates approval, let us now tackle FHA loan rates guidelines which are used by lenders in determining the loan amount, period and interest payment qualified for:
- Credit Reports required for FHA loan rates approval is known as Three Repository Merged Credit Report (TRMCR); in some cases FHA Loan Rates information will be augmented by a Residential Mortgage Credit Report (RMCR) and/or a Non-Traditional Mortgage Credit Report (NTMCR).
- Generally, FHA loan rates require a borrower to pay a three and a half percent (3.5%) cash out based on the total contract price (Housing and Economic Recovery Act of 2008).
- In case of forward mortgages the lender may collect reasonable fees, closing costs and other reasonable fees which are negotiated between the borrower and the lender, but must comply with a three tiered FHA loan rates pricing rule.
When it comes to computing monthly repayment and/or interest only rates for FHA loan rates approval it would be best to use applicable loan calculators available in the web. For example, if the property is located in India it would be best to use the State Bank of India calculator otherwise known as the SBI home loan calculator because different states or countries require different computation methods and charge different interest rates.
In closing, it would be best for first time home buyers to take advantage of FHA loan rates because this program was specifically passed to help lower income level and because this program is incorporated in the Making Home Affordable Program, consumers must remember any request for modification based on FHA loan rates should not be charged any fee to qualify for or be considered for the program. Any entity that requires a fee is a fraud and must be reported to the Federal Housing Authority or any qualified government entity for proper action.