Mississippi FHA Loans
Mississippi's FHA (Federal Housing Administration) loans continue to expand the opportunity for seasoned home buyers and first-time home buyers to access low downpayment, low interest rate financing for a home!
When considering a mortgage program, one of the most important factors in a borrower qualifying is your debt ratios. This website provides mortgage loan calculators which you can use to estimate a loan amount and determine affordability for financing based upon your total income and present liabilities -- your calculated debt ratios. Though rates vary by mortgage product type, our mortgage calculators are very reliable for determining future loan payments. By using the MS FHA loan program, borrowers obtain more flexible front and back-end ratios that start at 29% for housing!
FHA loans in Mississippi follow the following calculations for a customer's maximum monthly payment amount:
- Housing Ratio - Also known as the "front-end" ratio. The home buyer or homeowner should multiply their gross qualifying monthly income by 29%. For example, if your gross monthly income is $4,500, then your maximum monthly mortgage payment PITI should not exceed $1,305 a month (also see our how much home can I afford calculator).
- Total Debt Ratio - Also known as a "back-end" ratio. Using your proposed monthly mortgage payment of $1,305 as a starting point for housing, you would add into that any monthly credit card payments, installment payments, car payments, child support, monthly tax lien payments, and other monthly payments as reported within your credit report. Using our example of $4,500 gross monthly income, your maximum ratio at this time, would be 41% -- or $1,845 a month. Anything above this amount will need to be deducted from your front-end ratio to arrive at a total PITI amount with which you can qualify for. So, if your back-end ratio is $2,145, in order to meet the 41% cap on total debt, you would need to deduct $300 from your proposed housing payment -- leaving you with a total front-end ratio PITI for qualifying in the amount of $1,005. The amount of debt you have plays a huge role in how much home you can purchase! For further details, be sure to check out our how much mortgage can I afford calculator.
Fortunately, we do have flexibility in underwriting. In many instances, we can exceed ratios by sometimes 1 or 2 percent -- all depending on your credit quality and other stability factors that show a consistent ability to meet current and proposed payments.
A Mississippi homeowner or home buyer's choice of a lender can really spell the difference between high costs and significant savings, or an approved loan versus just another disappointment. Each lender makes underwriting decisions based upon their tolerance for risk. To obtain the best FHA loan packages, these are some things we would really like you to consider:
- APR (Annual Percentage Rate) - Different lenders have different APRs. The fact is, shopping a loan by APR is exceptionally risky; different companies factor different costs into their APR calculation.
- Interest Rates - A lower interest rate does not necessarily mean a better deal. If you finance your home into the wrong loan, it will cost the typical home buyer over $20K in costs and lost money to correct. Just look at current and recent foreclosure rates! Most of these foreclosures have more to do with the type of loan borrowers took out than they do with "greedy banks" trying to make more money. We know this, and will always do everything possible to understand your needs, give you good counsel, and place you in the right loan the first time.
- Turnaround & Processing Time - Usually ignored, but most of the time very critical! Turnaround time may affect actual payments, cost of the loan, and could even cause you to lose that "low rate" that some other lender promised. If you're getting excessive delays, there is a good chance you either have a problem loan, a novice L/O (watch out for getting put into the WRONG loan program), or the mortgage company just can't deliver the interest rate the loan officer promised. Processing time usually takes 30 days from mortgage application, dependent upon how quickly documentation is supplied. We work hard to make sure you know exactly what we need to prevent delays and duplicate work.
Benefits Of Mississippi FHA Loans
Aside from the flexibility that the Mississippi FHA mortgage provides, there are other beneficial features of Mississippi FHA loans. For example, down payment assistance is allowed. FHA guidelines are offered to protect homeowners and home buyers, including first-time FHA loan borrowers. Absolutely no prepayment penalties are allowed on your Mississippi FHA loan. The FHA program provides both fixed rate and adjustable rate options. A minimal downpayment of 3.5% of the purchase price is all that is required for buyers. Your seller can even help with closing costs and prepaids, up to 6%.
What have you got to lose? Give us a call today and learn more about how our mortgage programs can help you buy or refinance your home!