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Buying a home with an FHA Loan

Purchasing a new home is an exciting time. There has never been a better time to buy your new home! We are currently in a buyers market…large inventories have caused for bargain prices and in an effort to stimulate the economy we have low fixed rates for very affordable monthly mortgage payments. However, choosing the best financing for your home is just as important as finding the right home.

Why FHA?

  • FHA is a smart option when buying your new home because:
  • FHA has low fixed rates.
  • Your down payment is only 3.5% of the sales price.
  • The 3.5% down payment can be a gift from a family member or employer, or labor union. The closing costs can also be a gift from a family member.
  • The Seller can pay up to 6% of the sales price towards your closing costs.
  • Qualify with a minimum middle credit score of 500.
  • You can add a non-occupant co-borrower to help you qualify for your home loan.
  • NO pre-payment penalty.

Whether you are a first-time home buyer or a move up home buyer, make sure you are working with an FHA financing expert that can help you close your home loan in a quick efficient manner.

Click Here: For FHA Loan Limits in your area.

Why Pacific Ally Mortgage?

Buying a home is one of the single most important purchases in our lives. That is why it’s so important to choose a truly experienced and reputable mortgage company. Our team has 38 years combined team experience originating FHA and VA loans!
Additionally, each on of our Loan Officers has fulfilled the most current and up to date training in FHA, VA, and specialty loan programs in order to provide you with expert advice.
We are proud to be recognized as a boutique mortgage lender providing first rate customer service with guaranteed low rates and fees.

FHA Mortgage Insurance

It’s important to understand that FHA does not lend money for your loan. FHA insures the total mortgage so that if a homeowner defaults, the lender will be reimbursed. This allows for FHA approved lenders to provide competitive rates, more liberal qualification standards than with typical conventional loan programs, and larger loan amounts allowing for a smaller down payment.

The way FHA is able to insure these loan programs is thru FHA’s (UFMIP) Upfront and Monthly Mortgage Insurance (MMI) premiums paid by the homeowners. Upfront Mortgage Insurance, currently at 1.75% of the loan amount, is financed onto the loan, to keep the closing costs at a minimum. The Monthly Mortgage Insurance premium, typically referred to as MMI, is 1.25% of the loan amount. In most cases, the insurance cost to the homeowner will drop off after five years or when the remaining balance on the loan is 78 percent of the value of the property – whichever is longer.

Sample for Mortgage Insurance Calculations:
Mortgage Amount $300,000
Upfront Premium X 1.75 %
                                                                                            Total $  5,250
(Upfront premium is financed into the loan)
Total New Loan Amount: $305,250
Mortgage amount $300,000
Annual premium (MMI) x 1.35%
                                                                                       Total $4,050
/ 12 months
Total Annual Premium per Month: $337.50

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