FHA loans are perfect for First time Buyers!

FHA loans have been around for a long time.  Actually FHA (Federal Housing Authority) has insured more than 37 million home loans for Americans since 1934!  It was primarily designed to help mainly first time homebuyers (even though you do not need to be a first time home buyer anymore) to purchase a primary residence with as little as 3.5% down payment and FICO scores as low as 620.  In the recent past, FHA only accounted for about 3% of home loans originated but now accounts for close to 30%!  The reason is that a first time homebuyer may not have 15% down payment or a 720 FICO score that a conventional loan requires.  Anyone who can qualify full documentation (pay stubs, W2s, tax returns, bank statements), has a 620 FICO, 3.5% down payment, no federal liens outstanding as is looking to buy a primary residence can qualify for an FHA Loan.  
FHA charges an upfront MIP (Mortgage Insurance Premium) of 1.75% of the base loan amount.  FHA allows this premium to be financed.  Then there is also a monthly MIP until one reaches 20% equity in their home.  The monthly MIP is required for a minimum of 5 years and run 55 dollars a month per every 100k borrowed.  Example for a 300k loan your buyer will have $5,250 for the upfront MIP financed into the loan amount and monthly MIP will be 165/month. 
There are no longer income restrictions either. 
More and more sellers/listing agents are beginning to come around and accepting FHA loans.  Look at it this way – As a seller, all things being equal, FHA financing opens the doors to more potential buyers as again, most first timers do not have 15% or a 720 FICO score.  Sellers shouldn’t be scared of FHA buyers as it’s a full documentation loan so if they are Pre-Approved by a legitimate lender the buyer is just as qualified as a Conventional buyer.

FHA may be right for you! Please contact me for more information.
Thomas Ray,M.S.,Realtor
Cell/Txt:310-420-1149
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Happy Thanksgiving everybody!!!....Tom