Mortgage Services, Inc. has completed thousands of FHA loans over the years and many borrowers have the same questions. Here’s a list of the most often asked questions during the FHA loan process.
Are you part of the HUD / FHA?
No, we are not the Federal Housing Administration nor are we affiliated with the FHA. The FHA is not a lender; they merely insure the mortgage which is why we are able to give a find great loans for borrowers. We provide you the information and options regarding FHA loans.
Why should I ask for more information through this website?
HUD Mortgage Loan is the preimiere FHA resource, and helps homebuyers with home loans. Our loan officers are FHA specialists and have the knowledge to answer your FHA mortgage questions.
Why should I get a HUD / FHA loan versus a conventional loan?
The FHA loan is a program set up to help people with little or no down payment purchase homes. FHA loans can provide up to 96.5% financing on a home.
How do interest rates change?
Interest rates can be very volatile and can be difficult to predict in the long term. Generally, as the price for US Treasury Bonds increase, rates will decrease, and vice versa. Interest rates are updated every morning, and sometimes throughout the day if the financial markets are changing.
Does the FHA control their interest rates?
No, the FHA does not directly influence interest rates. The rates are set by banks buying and selling mortgage bonds. FHA interest rates change just like conventional loans.
I heard the Federal Reserve lowered the prime rate. How does this affect FHA loans?
The lowering of the prime rate does not affect FHA loan rates as much as many people think. While it's related, the Federal Reserve doesn't directly affect long term rates such as the FHA home loan.
You are eligible for a streamline refinance if rates go down. A streamline refinance does not require a new appraisal. Be sure to request a quote for a streamline refinance if you want more information.
Is there a pre-payment penalty on an FHA loan?
No, there is no pre-payment penalty on a FHA loan. You are allowed to pay off the loan partially or in its entirety at any time without a penalty.
Can I use a co-borrower to help get approved?
Yes, FHA will allow a co-signer that is not living in the house unlike conventional loans in which the borrower still needs to meet certain qualifying ratios even if they have a co-signer.
How soon should I apply for an FHA loan if I do not have a house in mind yet?
You can get pre-qualified at any time for your FHA mortgage, even without a property or house in mind. Many times this is the best way to go so you can solve potential problems before you have a sales contract. This will make the process easier for all parties involved.
Can I use my spouse as a co-borrower?
Your spouse is a possible co-borrower for an FHA loan. You can use your spouse's income to help approval.
Is there any obligation or cost to get pre-qualified?
No, it does not cost anything. We will be happy to assist in seeing if pre-qualification is possible for you. There is never any fee or obligation to get pre-qualification.
Are the FHA rates better or worse than conventional rates?
It depends on your specific situation. It would be smart to compare both before making a final decision. However, if you only have funds for a small down payment, the FHA loan will most likely be better suited for you.
My realtor has suggested that FHA loans are not worth it. Is this true?
Years ago, FHA loans were harder to get approved in a timely fashion. But now the approval process is similar to a conventional loan. Your realtor isn't doing you any favors if they say to avoid a FHA loan.
The first step is to get pre-qualified. It's generally a good idea to do this before putting an offer down on a particular house.
Do I need to put money down in order to purchase a house with my FHA Loan?
Yes. An FHA loan requires at least 3.5% down. But you can roll in your closing costs into the loan.
Should I consider an adjustable rate FHA loan?
If you believe you will move before the temporary fixed rate term ends, then it would make sense to consider an adjustable rate FHA loan. However, if there is a chance you will stay long term in this house, the safe bet would be to stick with a fixed rate.
How can I get more information about a FHA loan?
You can contact the FHA directly or ask a professional loan consultant who specializes in FHA loans. When you fill out the online quote application you will be contacted by one of our FHA loan specialists.