FHA Loans Huntsville, AL 

FHA loans, insured by the Federal Housing Administration, are a popular option for homebuyers in Huntsville, AL, particularly first-time buyers or those with lower credit scores. They offer several benefits, including lower down payment requirements and more flexible credit score qualifications compared to conventional loans. FHA Loans are popular loans in Huntsville, AL and all of Alabama and Tennessee. 

What are the benefits of an FHA Loan?

FHA insured mortgages are some of the best kinds of mortgages available. This is because they can help more people into the home buying market. Check out the list below to understand some of the most basic benefits of an FHA mortgage.

Easier to Qualify for –  lower credit limits and higher income limits which open more options for more homebuyers. 

Low Down Payment – only require a 3.5% down-payment. Additionally the 3.5% can come in the form of a gift, unlike many other loan programs.

Lower Credit Borrowers Qualify – because FHA insured loans are backed by the government, those with a poor credit history have an easier time getting this kind of loan.

Better Interest Rates – with the backing of the government these loans typically have a better interest rate than most traditional mortgage loans.

Better Home Stability – the FHA has programs designed to help homeowners keep their homes during hard times. They will work with you to help you keep your home from falling into foreclosure. Always try to work out problems with your lender before the situation becomes dire.
 
 
FHA Loan Checklist
When you're applying for an FHA loan the following list of documents will help expedite the process. We can help you understand any part of the FHA loan process.

Employment Info

• Past two years completed tax returns.
• Past two years W-2's, 1099's and any other necessary tax forms.
  One month worth of newest pay stubs.
• Self-employed will need three years tax returns and YTD Profit & Loss Statement.
  Savings Info
• Past three months full bank statements for all accounts.
  Any recent statements from investment accounts (retirement, 410k, mutual funds, etc.).
  Personal Info
• Driver's License or other official State identification.
• Any Divorce, Palimony, Alimony Documents.
• Green card or work-permit (if applicable).

Frequently asked questions
 
What is the FHA?

FHA stands for the Federal Housing Administration. It was created in 1934 to help Americans get into homes.

What makes an FHA insured mortgage beneficial?

It is easier to qualify for and can be obtained with less than perfect credit Plus it costs less and requires a smaller down payment.

Where can I find FHA forms and other literature?

A great source for FHA forms and information is https://www.hud.gov/topics/buying_a_home.

What is the FHA loan limit in my area?

The loan limit across the country is different. 

Can I pay an FHA loan off early?

Yes, however be sure to check the pre-payment section of your Closing Disclosure before signing. 

Can an FHA loan help me lower energy costs?

Yes, through the Energy Efficient Mortgages Program you can finance 100 percent of the cost of making your home more energy efficient.

Can I refinance an FHA loan?

Yes. Talk with one of our professionals today to see if refinancing makes sense for you.

What is the recommended debt-to-income ratio for FHA loans?

The recommended debt-to-income ratio for a FHA loan is 30%. However, the limit is 55%. 

Are FHA loans assumable?

Absolutely, you can assume an existing FHA loan or allow a buyer to assume yours.

Will I have to pay mortgage insurance with an FHA loan?

Yes, in fact FHA mortgages often require you to carry mortgage insurance for the entirety of the loan. 

Can I get a "fixer-upper" of a home with an FHA mortgage?

Yes, however, you might be required to fix certain problems in the home before you can get the full loan. 
 
FHA Qualifications
 
To qualify for an FHA loan, a borrower typically needs to meet these criteria:

• Proven employment status of at least 2 years.
• Steady or increasing income over a 2-year period.
• History of on-time payment. No more than two missed payments on your credit.
• If you've filed bankruptcy, you must wait at least 2 years and have good credit since you filed.
• Those with foreclosures must wait at least 3 years from the date of recording of the foreclosure. 
• Monthly mortgage payment should be roughly 30% of your gross income. But will allow for up to 55% debt to income.
• You must pay a minimum of 3.5% down payment.
• The property must be your primary residence.
   

 FHA Streamline Refinance

 
What Is an FHA Streamline Refinance?
If you already have an FHA mortgage, then you might qualify for a FHA Streamline Refinance. An FHA Streamline Refinance is a great way for a borrower with an existing FHA backed mortgage to reduce their interest rate, reduce their payment or possibly both.

Here are some cool facts about an FHA Streamline Refinance:

• No Appraisal is Required – because your loan is already guaranteed by your existing FHA loan, the FHA will allow you to use your home’s original purchase price as your home’s current value.
• You can still refinance even if you are underwater – even if you owe more than your home is worth, you might still be able to get an FHA Streamline Refinance loan.
• There is no FHA prepayment penalty to worry about.
• FHA Streamline refinance rates are the same as “regular” FHA loan rates.
• Employment verification is not required with an FHA Streamline Refinance – in other words, no paystubs, no W-2s or tax returns are required for approval.
• Income verification is not required with an FHA Streamline Refinance.
• Credit score verification is not required with an FHA Streamline Refinance – instead of checking your credit, your payment history is used to determine if you qualify or not. You must have no late payments in the last 90 days and only one or less late payment within the last 12 months.
• The Refinance Must Have A "Purpose"
• Streamline Refinance applicants must demonstrate that there's a Net Tangible Benefit in the refinance or in other words a legitimate reason for refinancing. For Example:

Streamline Refinance applicants must demonstrate that there's a Net Tangible Benefit in the refinance or in other words a legitimate reason for refinancing.

 For Example:

• Refinancing from an Adjustable-Rate Mortgage to a Fixed Rate Loan.
• Reducing your principal + interest + mortgage insurance 5 percent or more.
• Your loan balance may not increase To cover the new loan costs
• The FHA prohibits increasing a Streamline Refinance's loan balance to cover associated loan charges. The new loan balance may increase but only by the cost of the Upfront Mortgage Insurance Premium. All other costs -- origination charges, title charges, escrow -- must either be paid by the borrower as cash at closing or credited by the loan officer in full.

If you have more questions that I covered here, please call Tim Byrne at 256-542-1517 or email me at Tjbyrne@southstatebank.com

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Even though I am located in Huntsville, AL, service Alabama, Tennessee, Florida, Georgia, South Carolina, North Carolina, Virginia, Colorado and Texas.