FHA loans allow borrowers with limited cash or credit to qualify for a mortgage on their primary residence.
Insured by the Federal Housing Association, FHA loans do not require you to be a first-time home buyer. You must simply demonstrate a steady income and the ability to make a 3.5% down payment on your home.
What would be my monthly payment on an FHA loan?
See our mortgage payment calculator to figure out what your FHA loan payment is likely to be.
What is the current FHA loan interest rate today?
FHA mortgage rates vary depending on your credit and income, as well as the ups and downs of national mortgage rates. Rates can change every day, so it’s smart to find out what rate you qualify for today.
Frequently Asked Questions
What are the advantages of an FHA loan?
- Low 3.5% down payment
- Lower credit score OK: as low as 580 FICO
- Family gift funds can cover 100% of your down payment
- Relaxed debt-to-income requirements
- Easy and fast refinancing: no appraisal required with an FHA Streamline Refinance (learn more)
What are the disadvantages of an FHA loan?
- Mortgage insurance is required for some or all the duration of the loan, which means that your total monthly payment may be higher than with a non-guaranteed loan
- FHA interest rates may be a little higher than conventional 30 year fixed rate home loans.
- Borrowers must demonstrate sufficient income to cover the loan
How does an FHA loan work?
After you meet FHA loan requirements, you can choose either a fixed- or adjustable rate mortgage. (Newfi offers 30 year fixed and 5 year adjustable terms.) As mentioned above, government mortgage insurance is a fact of life with FHA loans: you’ll need to pay a 1.75% upfront premium (which can be rolled into the loan balance) and then monthly premiums after that.
With an FHA loan, you can pre-pay your mortgage at any time with no penalties. You can also refinance your FHA loan quickly with an FHA Streamline Refinance.
How does an FHA loan compare to a conventional 30 year mortgage?
- A 30 year mortgage usually has a lower interest rate than an FHA loan and can be approved faster. Down payments can be as low as 3%, but if your down payment is lower than 20% you will likely need to pay for private mortgage insurance. You will also need better credit: a credit score of 640 or higher is ideal. Learn more about 30 year mortgages
- An FHA mortgage permits buyers to access credit with a lower credit score and a down payment as low as 3.5%. A borrower will have to pay monthly FHA mortgage insurance for some or all of the life of the loan, whereas private mortgage insurance is automatically cancelled once you have paid down your loan sufficiently.
Why trust Newfi Lending with your FHA loan?
Newfi is a direct lender, not a broker, so we can make lending decisions fast and at low interest rates. We’ve earned a five-star customer satisfaction rating from LendingTree for our low rates, fast processing, and excellent customer service. Give us a call at (888) 316-3934 and see just how friendly we are!