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Everything You Must Know About Michigan FHA Home Loans
Michigan FHA Home loans offer some unique advantages for prospective home purchasers looking to apply. Like conventional loans, FHA insured loans offer attractive fixed rates for 10, 15, 20 and 30 year terms. Unlike their conventional counterparts, FHA home loans are insured by HUD. This insurance is funded by borrower paid premiums that are collected on every FHA loan. This premium is partially financed (included in the borrowerâ€™s mortgage amount) when a new FHA mortgage is originated, and partially collected as an annual premium that is paid monthly in the borrowerâ€™s home payment.
Important Requirements for Michigan FHA Home Loans
An FHA insured home loan willÂ allow purchasers to buy a primary residence with a low 3.5% down payment. While FHA guidelines do not have an explicit â€œminimumâ€ credit score requirement, most FHA lenders in Michigan require that the credit score be at least 600 when they apply. Compared to a conventional home loan with a similar down payment, these credit requirements are quite lenient. In fact, a borrower with a credit scores less than 680 will generally find FHA financing as their best option for a home loan.
Other unique highlights of FHA loans in Michigan include:
Shorter waiting period for eligibility after a significant negative credit event such as a bankruptcy (2 years) or foreclosure (3 years). With the effects of the recession still lingering, this is an important feature, as it can allow someone who, perhaps, lost a home during the downturn to re-enter the home ownership ranksÂ and apply sooner. However, there will still be a minimum credit score requirement so it is essential that the score has recovered from the negative credit event.
Down payment can be 100% gifted. None of the monies used for down payment or other transaction costs have to be the borrowerâ€™s own funds. This allows a prospective borrower to have little or no savings and still be eligible to purchase a home if they have a family member willing to give them the funds needed to close. To apply simply click the button below;
Non-occupant co-borrowers can be added to help qualify. Michigan FHA loans allow the addition of a non-occupant co-borrower to offset a primary borrowerâ€™s non-qualifying debt ratios. In other words, if an otherwise eligible borrower doesnâ€™t qualify due to excessive debt obligations or insufficient income, a non-occupant co borrower can be added to the transaction to supply additional monthly income for qualifying.
FHA loans are assumable. This may turn out to be the best feature of them all. With historically low interest rates, using an FHA loan to finance your home purchase may become a future selling feature. FHA loans can be assumed, in other words, a future purchaser can â€œtake overâ€ the existing mortgage obligation from a seller. With rates in the low 4% range, it isnâ€™t hard to imagine a future marketplace with markedly higher rates and would-be purchasers competing for a house that offered a low rate FHA loan to assume.
As one of several FHA lenders in Michigan, we would love to help you apply for your FHA financing. We have over 20 years of mortgage lending experience and Michigan Mortgage Solutions is fully licensed to originate FHA loans in Michigan. We look forward to earning your business and helping you with any mortgage needs you may have. To apply simply click the button below;
Designed with ease of use and accuracy in mind
Most mortgage calculators force users to input unknown data like mortgage rates or mortgage insurance. Without the correct data these calculations become worthless. Our app populates this data for the user based on up to date mortgage rates and accurate mortgage insurance quotes based on loan product and credit score.
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