Stop renting and start building your future. An FHA loan from your local mortgage experts makes homeownership more accessible than you think.
Understanding the FHA loan
An FHA loan is a mortgage insured by the Federal Housing Administration (FHA). This government backing allows lenders like Directions Home Loan to offer more flexible terms, especially for first-time homebuyers. An FHA loan is one of the most popular loan types for a reason — it’s designed to open the door to homeownership for more people.
Here’s how an FHA loan can help you get that first house you’ve been dreaming of:
- Low down payment: Buy a single-family home with as little as 3.5% down payment, so you can keep more of your money for moving costs, furniture, or savings.
- Flexible credit: Lenient credit score requirements welcome those with less-than-perfect credit or a limited credit history. Even if you don’t have good credit, you might still qualify.
- Gift funds allowed: You can use gifted money from family or an eligible third party to cover your down payment and closing costs.
- Higher debt-to-income (DTI) ratios: The guidelines for your DTI ratio are often more flexible than with conventional loans, giving you more purchasing power.
Who is the FHA loan for?
This type of loan is a great fit if you’re a first-time homebuyer, have limited savings for a down payment, or are working on improving your credit score. We can also discuss potential payment assistance programs that might further reduce your out-of-pocket payments.
Do I qualify for an FHA loan?
Life happens. That’s why FHA loans were created. We specialize in helping homebuyers with varied credit histories achieve their dream home. While every situation is unique, below are the general requirements to qualify for an FHA loan with us.
Details & Requirements:
Credit Score
The minimum credit score for an FHA loan starts from 580. A lower credit score requirement helps many borrowers who might not qualify for other loan types.
Down Payment
There’s a minimum down payment requirement of at least 3.5% for scores of 580 and above.
Income & Employment
Proof of steady employment and verifiable income must be provided. We’ll help you figure out exactly what documents you need.
Property Type
The property must be your primary residence and meet FHA minimum property standards for safety, security, and soundness, as determined by an FHA-approved appraiser. This confirms the property value aligns with the loan amount and purchase price.
Why choose Directions Home Loan for your FHA loan?
While big banks and online-only lenders see applications, we see families. We’re here to help you understand your loan term, mortgage rates, estimated monthly mortgage payment, and the maximum loan amount you could qualify for.
Partnering with us means you’re benefiting from:
- 17+ years of expertise: As a trusted FHA lender, we understand the unique aspects of the housing market and know the FHA loan limits in your area.
- A dedicated loan partner: Forget call centers. You’ll have one point of contact who knows your name, your goals, and is committed to helping you purchase your home.
- A simple, stress-free process: Our award-winning team is here to make your journey to homeownership smooth and clear. We help you navigate everything, from the application to your final loan balance.
Blogs and insights
Stay informed with our latest articles and insights on FHA loans, homeownership, and the real estate market.
When to Refinance a Home Mortgage
When to Refinance a Home Mortgage
FHA vs conventional loans: Which option is best for you?
FHA vs conventional loans: Which option is best for you?
Reasons to refinance your home: A comprehensive guide
Reasons to refinance your home: A comprehensive guide
Frequently Asked Questions
How is such a low down payment possible? Is there a catch?
There’s no catch, but there is a key feature: mortgage insurance. FHA loans require both an upfront mortgage insurance premium (UFMIP) and a monthly mortgage insurance premium (MIP). This FHA mortgage insurance protects lenders from loss, which is what allows a trusted FHA lender like us to offer you a home loan with a low down payment and flexible credit requirements. With these mortgages, we can help you become a homeowner years sooner.
What’s the difference between an FHA loan and a conventional loan?
The main differences between the two lie in the down payment, credit requirements, and mortgage insurance. FHA loans typically have a lower down payment and more flexible credit score rules. Conventional loans may require a higher score and down payment, but might not have mortgage insurance with 20% down. We’ll review your credit profile and financial goals to help you determine the best option for you. We can also discuss if other loan types, such as those from Veterans Affairs for service members, might be a better fit.
What kind of property can I buy with an FHA loan?
You can use an FHA loan to buy a primary residence, meaning the home you will live in. This can include a single-family home, a two- to four-unit multi-family property (if you live in one unit), a condominium in an FHA-approved project, or a manufactured home on a permanent foundation. The property must undergo an FHA appraisal to guarantee it meets safety and quality standards.
How long does the FHA loan process take?
A typical mortgage process can take anywhere from 30 to 45 days from application to closing. However, the exact timeline can vary. The good news is that working with a responsive team like ours can help streamline the process and avoid the delays commonly experienced with large, national lenders.
What is included in my monthly mortgage payment?
Your monthly mortgage payment typically includes several components: principal and interest (P&I), property taxes, and homeowner’s insurance (often combined into an escrow account). Should you avail of an FHA loan, it will also include a monthly mortgage insurance premium (MIP). We will provide you with a clear breakdown of your estimated monthly payments so you know exactly what to expect.
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