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Abilene FHA Home Loans

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Abilene FHA Home Loans

The Federal Housing Administration established the FHA Home Loan Program to assist individuals and families with low to moderate incomes purchase their own homes.

FHA loans are affordable and easy to qualify for. They can also be used to buy, renovate, or refinance a home or even finance purchasing a manufactured home and the land it will sit on. This flexibility, combined with its more lenient credit and qualification requirements, makes the FHA home loan program one of the most attractive mortgage options for first-time homebuyers.

Pros and Cons of FHA Home Loans

Despite its popularity, the FHA loan is not without drawbacks. If you’re considering using this type of financing to buy a new home, you should carefully weigh the pros and cons of an FHA loan

  • Benefits of the FHA Loan

          1. Lower Down Payment and Credit Score

Conventional loans typically require a down payment between five and twenty percent. Moreover, it’s almost impossible to qualify for a conventional mortgage with a credit score below 620.

On the contrary, an FHA loan technically allows borrowers with credit scores of at least 580 to put down 3.5% of the home’s purchase price. It’s also possible to obtain an FHA loan with a credit score as low as 500 if you’re willing to pay more upfront.

          2. Higher Debt-to-Income Ratio

Even if your monthly debt payments are pretty high, you may still be able to get an FHA loan. To qualify for most mortgages, a household’s monthly debt payments should not exceed 43% of its gross monthly income. On the other hand, you may be eligible for an FHA loan with a DTI of up to 50%.   

          3. No Income Limits

Anybody may apply for an FHA loan as long as they have a stable source of income, at least two established credit accounts, and no unpaid federal debts or debt related to previous FHA-insured mortgages.

          4. Allows Seller Concessions

FHA loans allow sellers to pay up to 6 percent of the loan amount toward the buyer’s closing costs. This is of great help to many first-time buyers who may have money for a down payment but don’t have enough to cover the closing costs. 

          5. Competitive Interest Rates

Rates for FHA mortgages are typically lower than those for conventional loans. The FHA does not use a risk-based pricing structure that would disadvantage those with less-than-perfect credit. The interest rate is the same for all qualified borrowers.

  • Drawbacks of the FHA Loan

          1. Restrictive Housing Standards

The HUD has guidelines for what kinds of properties can be bought with FHA loans. The FHA loan can be used to purchase a single-family home, a multi-family home, a condominium, or even a mobile home, as long as the property will be used as a primary residence and meets minimum health and safety requirements. 

If you are planning to purchase a second home or an investment property, you may want to check out other mortgage options.

          2. Lower Loan Limits

FHA lending limits are typically 65% of conforming loan limits in a given area, making it difficult to purchase a home in high-cost areas with an FHA-backed loan. For 2022, the FHA loan limit for a single-unit home in Taylor county is $420,680, while the conventional loan limit is $647,200.

          3. Expensive mortgage insurance

High insurance premiums have always been the biggest drawback of FHA loans. An FHA loan’s mortgage insurance premiums (MIP) come in two forms: an upfront MIP and an annual MIP. 

In addition, regardless of how much equity the borrower builds up, they will have to continue paying for mortgage insurance for the life of the loan. With a conventional loan, you won’t have to pay insurance after paying 20% of your home’s equity. 

FHA Loans in Abilene, TX

The FHA loan may not be the most cost-effective option, but it’s one of the few mortgages that meet the needs and budget of low-to-average income households and first-time homebuyers.

Contact us today at (325) 387-8387!

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Abilene FHA Mortgage Rates

Have you ever wondered why interests rates are what they are and what determines the final rate?  Why borrowers receive different interest rates? Or why rates go up and down?  Interest Rates are calculated using several factors.

  • Demand for the mortgage Securities
  • Property securing the mortgage
  • occupancy of the property
  • Loan to value of the property
  • Borrower’s credit worthiness

Abilene FHA Purchase Loan

FHA Home Loans are mortgage loans for 1st time home buyers, buyers with limited credit, buyers with less than perfect credit and buyers with higher debt to income ratios.  As the goal of FHA is to make homeownership more attainable, FHA underwriting guidelines are less strict than other mortgage loan programs.  This FHA flexibility allows for easier loan qualification making the barrier to homeownership less challenging.
  • Simple Qualifying
  • Small Down Payment
  • Seller Paid Closing Costs to 6%
  • Flexible Underwriting
  • Higher Debt to Income Ratios Allowed
  • Lower Credit Scores Allowed
    • 580 with 3.5% Down Payment
    • 500 with 10% Down Payment
  • Manufactured Housing OK (Subject to Restrictions)
FHA Purchase Home Lender
FHA Home Loans are mortgage loans for 1st time home buyers, buyers with limited credit, buyers with less than perfect credit and buyers with higher debt to income ratios.  As the goal of FHA is to make homeownership more attainable, FHA underwriting guidelines are less strict than other mortgage loan programs.  This FHA flexibility allows for easier loan qualification making the barrier to homeownership less challenging.
  • Simple Qualifying
  • Small Down Payment
  • Seller Paid Closing Costs to 6%
  • Flexible Underwriting
  • Higher Debt to Income Ratios Allowed
  • Lower Credit Scores Allowed
    • 580 with 3.5% Down Payment
    • 500 with 10% Down Payment
  • Manufactured Housing OK (Subject to Restrictions)

Abilene FHA Refinance Loan

FHA offers a streamline refinance program that simply reduces the interest rate and lowers the payment or shortens the term of the loan.  This rate and term option can be fully documented loans, or can be reduced documentation.  The other FHA option is a cash-out refinance allowing homeowners the ability to access the equity in the property. (Not Allowed in Texas)
  • Streamline – Rate and Term Only
    • No Appraisal
    • No Income Verification
  • Full Documentation
    • Rate and Term
    • Closing Costs Can be Rolled In
    • Lower Credit Scores Allowed
      • 580 with 3.5% Down Payment
      • 500 with 10% Down Payment
    • Manufactured Housing OK (Subject to Restrictions)
FHA Home Refinance Lender

FHA offers a streamline refinances that simply reduces the interest rate and lowers the payment or shortens the term of the loan.  This rate and term option can be fully documented loans, or can be reduced documentation. The other FHA option is a cash-out refinance allowing homeowners the ability to access the equity in the property. (Not Allowed in Texas)

FHA Standard Refinance

  • Appraisal Required
  • 97.75% Max Loan to Value
  • Closing Costs Can Be Rolled In
  • 80% Max Loan to for Cash-out
  • Cash-out Option Available
  • County Loan Limits Apply

FHA Streamline Refinance

  • FHA to FHA
  • No Income Qualification
  • No Appraisal Required
  • Closing Costs Cannot Be Rolled In
  • No Lates on Mortgage in Last Year
  • Payment Must Drop on Fixed Rates

Abilene FHA 203K Loan

Not Sure? Take a Look at Other Abilene Mortgage Programs

Abilene Mortgage Team

Conor Hayhurst

Manager
NMLS 743506

Damon Embler

Sr Loan Officer
NMLS 882260

chris erwin

Sr Loan Officer
NMLS 914064

Dale Gremillion

Manager
NMLS 210325

Abilene Mortgage Company Reviews

What is an Abilene FHA Mortgage Loan?

FHA stands for “Federal Housing Administration” which is part of HUD ”Housing and Urban Development”.Established in 1934 and prompted by the great depression FHA had one goal: to make homeownership affordable. A great step in our nation’s history as the majority of Americans were renters, not having large down payments that traditional banks required.It is important to understand that FHA doesn’t lend money.  FHA instead provides lenders a guarantee that covers the lenders from loss in the event of a foreclosure. It simple terms FHA insures the portion of the loan that a buyer would have would normally had to put down to qualify for a traditional loan, allowing for small down payments to purchase.  All FHA loans require mortgage insurance.  The mortgage insurance comes in an upfront fee, which can be financed into the loan and a monthly fee made through the mortgage payment.  These installments from the payments support the guarantee fund and makes FHA loans possible.  This fee is fixed for the term of the loan and is the same regardless of credit. 

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