If you’re in the market for a mortgage loan with lenient credit, lower down payment and low-to-moderate income requirements, an FHA mortgage loan might be right for you.
- Ogden Mortgage Loans is an FHA mortgage broker for FHA mortgage loans for purchase and refinance loans for homes.
- FHA purchase loans require a down payment of 3.5% of the purchase price.
- If the home is a HUD home, then $100 down is the minimum required down payment.
- FHA mortgage loans are insured by FHA (a part of HUD, Housing & Urban Development) in case the homeowner is to default, then FHA will help pay a portion of the losses to the bank/investor that owns the loan.
- Because of this government insurance guarantee, FHA loans are less restrictive than conventional loans. Fico scores are typically a 580 minimum. In some cases, a 500 to 579 fico score is acceptable pending on many other factors that go into a loan qualification. Just because a Fico score is at a certain score doesn’t mean someone automatically will qualify for an FHA mortgage. There are a number of factors and reasons that go into being approved for a loan.
- Ogden Mortgage Loans is a mortgage brokerage that works with any different mortgage lenders all of the country. We get to know each client’s set of circumstances and find the best FHA loan for each client we help.
- Ogden Mortgage Loans has is committed to offering the best terms that include the best rates, lowest fee’s and top service to the community. We do not charge fees that other mortgage lenders and banks charge, such as: Processing fee, origination fee, underwriting fee, admin fee, other junk fee’s. These savings add up to thousands of dollars in savings for closing costs.
There are certain requirements you have to meet to qualify for an FHA loan, including:
- The home you consider must be appraised by an FHA-approved appraiser.
- You can only get a new FHA loan if the home you consider will be your primary residence, which means that it can’t be an investment property or second home.
- You must occupy the property within 60 days of closing.
- An inspection must occur, and the inspection must report whether the property meets minimum property standards.
There are a few more specific conditions to qualify, including a down payment amount, mortgage insurance, credit score, loan limits and income requirements. We’ll explore these factors in more depth below.
FHA Mortgage Loan Down Payments
Your down payment is a percentage of the purchase price of a home and is the upfront amount you put down for that home. The minimum down payment you’re able to make on an FHA loan is directly linked to your credit score. Your credit score is a number that ranges from 300 – 850 and is used to indicate your creditworthiness.
An FHA loan requires a minimum 3.5% down payment for credit scores of 580 and higher. If you can make a 10% down payment, your credit score can be in the 500 – 579 range. Ogden Mortgage Loans requires a minimum credit score of 580 for FHA loans. A mortgage calculator can help you estimate your monthly payments, and you can see how your down payment amount affects them.
Note that cash down payments can be made with gift assistance for an FHA loan, but they must be well-documented to ensure that the gift assistance is in fact a gift and not a loan in disguise.
FHA Mortgage Loans And Credit
There are a lot of factors that determine your credit score, including:
- The type of credit you have (whether you have credit cards, loans, etc.)
- Credit utilization, which is simply how much credit you use
- Whether you pay your bills on time
- The amount you owe on your credit cards
- How much new and recent credit you’ve taken on
If you have a higher score, you might be able to qualify with a higher debt-to-income ratio. DTI refers to the percentage of your monthly gross income that goes toward paying debts. Your DTI is your total monthly debt payments divided by your monthly gross income (your monthly income before taxes). This figure is expressed as a percentage.
To determine your own DTI ratio, divide your debts (student loans, car loans, etc.) by your monthly gross income. For example, if your debts, which include your student loans and car loan, reach $2,000 per month and your income is $8,000 per month, your DTI is 25%.
The lower your DTI, the better off you’ll be. If you do happen to have a higher DTI, you could still qualify for an FHA loan if you have a higher credit score.
The FHA states that your monthly mortgage payment should be no more than 31% of your monthly gross income and that your DTI should not exceed 43% of monthly gross income in certain circumstances if your loan is being manually underwritten. As noted above, if you have a higher credit score, you may be able to qualify with a higher DTI.
Areas we serve
- Ogden Mortgage Loans lends in all areas of Utah.
If you are looking for a FHA mortgage lender that offers FHA Mortgage loans, Ogden Mortgage Loans is an FHA mortgage broker that is committed to being a leader in FHA mortgage loans.