I wanted to clarify some MISinformation out there about FHA Home Loans. For some reason many people think FHA Loans are only for first time home buyers. I don’t know where this comes from, but it is totally false. Sometimes the media makes a mistake and falsely writes that FHA Loans are only for first time home buyers. FHA Loans can be used by ANYONE. Even if you have many other properties.
On that note, here is a reminder of some of the highlights of the FHA Home Loan:
- Only 3.5% down payment is required. And this can be a gift from a relative
- FHA loans are not credit score driven. You can get the best 30 year fixed rates available with an FHA Loan even if your credit score is not perfect.
- You can only get an FHA Loan on your primary residence
- You can only have one FHA Loan at a time (unless under special circumstance you can have more than one)
- FHA Loans allow non-occupying co-signers to help you qualify
- Many places in California you can get an FHA Loan up to $625,000 (that will likely go back up to $729,000 with the new Government stimulus bill)
- Interest rates on FHA Loans just as good as conventional interest rates
With the combination of low rates and prices that have fallen by 50% in some areas of California, you can put 3.5% and get an FHA Loan to buy a house and have the payment be very close or even less than rent:
$200,ooo house total payment:
- Mortgage Payment:$1,052
- Property taxes:$187
- Homeowners insurance: $50
- Mortgage insurance:$88 (drops off after 5 yrs and loan 80% of house value)
- Total payment:$1,377
$250,ooo house total payment:
- Mortgage Payment: $1,315
- Property taxes: $234
- Homeowners insurance: $50
- Mortgage insurance:$110 (drops off after 5 yrs and loan 80% of house value)
- Total payment:$1,709
$300,ooo house total payment:
- Mortgage Payment: $1,578
- Property taxes: $281
- Homeowners insurance: $50
- Mortgage insurance:$132 (drops off after 5 yrs and loan 80% of house value)
- Total payment:$2,041
Don’t forrget to also factor in the tax advantages of home ownership. You are allowed to write off the mortgage interest, property taxes and mortgage insurance. Those are write-offs you do not get when renting. That can amount to taking home a few hundred more per month with your paycheck that gets paid out in income tax when you rent.
So once again, FHA loans are not just for first time home buyers, they are for everyone.
Warm Regards,
Rob Chomentowski
Sr. Loan Officer and FHA Loan Specialist
858-922-7899 (direct)
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