FHA loans are government loans insured by the Department of Housing and Urban Development (“HUD”). The minimum down payment for these loans is 3.5% of the sales price. Mortgage insurance is assessed twice on these loans, once up-front with a one-time charge that is typically added to the loan amount, and then a fixed amount paid monthly. Mortgage insurance is assessed for the life of a FHA loan.
The only way to get out of mortgage insurance would be to refinance into a conventional loan. FHA loans are typically used by borrowers with lower credit scores and who do not have a lot of money for down payment. Often times, a conventional loan will provide better terms than a FHA loan, so it is a good idea to see if you can qualify for a conventional loan and then compare the two scenarios.
A property needs to be in turn-key condition to qualify for a FHA loan. Also, if you are looking to purchase a condominium with a FHA loan, the condominium must be on HUD’s approved condo list.
When shopping for the best mortgage broker in Arizona, you need to know the history of the company and their mortgage brokers. At Counsel Mortgage Group, LLC, founded by an experienced CPA and attorney, we have closed hundreds of loans over the years and specialize in assisting you to obtain the right loan. Check out our experienced mortgage brokers and give us a call today or contact us. We look forward to working with you!