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El Paso FHA Home Loans

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El Paso FHA Mortgage Lender

FHA Loans In El Paso

What is an FHA Home Loan?

A government-backed mortgage insured by the Federal Housing Administration is an FHA loan. FHA home loans are particularly well-liked by first-time homeowners since they have lower minimum credit score requirements and down payments than many conventional loans.

How Does an FHA Loan Work?

FHA loans are available with fixed interest rates and periods of 15 and 30 years. To help borrowers who might not be eligible for private mortgages have an opportunity to become homes, the agency has flexible underwriting guidelines.

The mortgage insurance premium, or MIP, is a fee paid to the Federal Housing Administration, which insures the loan against borrower default in the future. There are two types of mortgage insurance, upfront and monthly.

  • Upfront Mortgage Insurance Premium – The borrower pays 1.75 percent of the loan amount, and borrowers can incorporate the premium into the total amount borrowed.
  • Annual Mortgage Insurance Premium – The borrower will be charged an annual MIP rate of 0.85%, divided into 12 equal monthly installments.

Texas FHA Loan Requirements

  • Credit

A credit score of 580 is required on all FHA loans to qualify for a 3.5% down payment. However, borrowers with scores below 580, down to 500, may still be eligible with a minimum 10% down payment, and certain restrictions will apply to the loan.

  • Income 

Lenders base their decision on a borrower’s ability to make a comfortable mortgage payment and qualify for a specific loan amount largely on their debt-to-income ratio. There are two types of DTI ratio, front-end, and back-end.

    • Front-End RatioYour monthly gross income is calculated and divided by the estimated mortgage payment, taxes, insurance, and MIP to get your front-end debt-to-income ratio. Only the debt related to home is included in this computation. According to FHA regulations, the maximum front-end ratio is from 31% to 40%, depending on the borrower’s credit rating.
    • Back-End RatioYour total debt-to-income ratio is what the back-end ratio is. This includes any additional consumer debt on your credit report and projected housing debt. If your income levels are high enough, it will come down to the back-end ratio. The acceptable back-end ratio is 45 – 55%, depending upon your credit score.
  • Assets

FHA loans require a 3.5% down payment for borrowers with a credit score of 580 and up. To close the loan to buy a house, all borrowers must show where the funds are coming from. Depending on the borrower’s circumstances, they may be required to carry reserves. 

The equivalent of one month’s mortgage payment is one month’s reserve (principal, interest, taxes, insurance, flood insurance, HOA dues, and mortgage insurance). According to FHA criteria, reserves are not necessary to be eligible for a loan. Based on the borrower’s credit, the reserve requirement is determined case-by-case basis.

Apply for an FHA Loan in El Paso

FHA loan is the easiest and most lenient among all loan programs available in El Paso. Call us at (915) 283-3949 to speak with our FHA Loan Specialists on how to qualify for an FHA loan.

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El Paso 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

El Paso 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)

El Paso 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 El Paso Mortgage Programs

El Paso Mortgage Team

Conor Hayhurst

Managing Director
NMLS 743506

Damon Embler

Sr Loan Officer
NMLS 882260

Chris Erwin

Loan Officer
NMLS 914064

Dale Gremillion

Manager
NMLS 210325

El Paso Mortgage Company Reviews

What is an El Paso 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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