Virginia FHA Loans
The Federal Housing Administration mortgage loan or simply FHA loan is a loan program that works in helping Virginia home buyers who have little or no money for down payment. The Federal Housing Administration mortgage loans are the best home mortgage loan programs for the new home buyers who possess only a small or zero down payment. Typically, if you are going to avail of a Virginia FHA mortgage loan, it usually requires 3.5% on down payment.
The Virginia FHA Loan is a kind of loan fully backed up by the government, specifically the US Department of Housing and Urban Development or the HUD. HUD assumes all the risks involved in the loan, which permits more people who normally might not have qualified for a usual loan to actually acquire a mortgage so that they may be able to buy their own home.
Types of Virginia FHA mortgages
The Virginia FHA offers a wide variety of mortgage loan programs to the large state population, with its mortgages having either fixed or adjustable rates of interest.
- Fixed Rate FHA mortgages are set on a specific time at a certain interest rate. The interest rate does not change, meaning the mortgage payment is the same throughout the duration of the loan except perhaps for changes in property tax and homeowner's insurance. Fixed rate FHA mortgages usually cannot be assumed and have a pre-payment penalty. If you plan to own your property for a long period of time, fixed rate FHA mortgages are ideal for you.
- Adjustable Rate FHA Mortgages are set on a specific amount of time, but there can be changes in interest rate during the duration of the loan. Usually with the adjustable rate, the interest rate is fixed during the first three or four years, but after this period the rate of interest rate increase and consequently the mortgage payments. Adjustable rate FHA mortgages are ideal for those who only plan to live in their home for only a short period of time, the same time when the interest rate of the mortgage is fixed.
We can safely say that the Virginia FHA loans are excellent and reliable loan programs especially for the first time home buyers because they are the ones who usually experience the greatest amount of difficulty in producing the down payment. FHA mortgage loan programs are actually also meant for home buyers who have very limited credit capacity.
If you are a Virginia borrower, surely you will find the Federal Housing Administration mortgage loans very attractive as you can enjoy the following benefits and advantages of Federal Housing Administration mortgage loans:
- FHA mortgage loans have minimum qualifications that are much easier to fulfill that the traditional mortgage loans
- You enjoy low rates on FHA mortgage loans
- Gifted funds are accepted as down payment
- Low down payment, usually at around 3.5% down and less
- Seller may contribute up to around 56% of the sales price
- Low mortgage in Mortgage Insurance (MIP)
- No minimum requirements on your credit score
- Approved condominiums are welcome, and there is no required up front payment on mortgage insurance
- If you have past bad credit, this is not a problem. Federal Housing Administration underwriting guidelines are much more liberal than the guidelines for most other mortgages. Past bad credit does not automatically mean you can't get a low interest mortgage
- Even bankruptcy status, so long as it has been 2 years since its discharge, is not a problem when acquiring an FHA home loan
Virginia FHA buy-down loan
FHA buy-down loans are 15 or 30-year fixed-rate mortgage loans where you or the seller have pre-paid interest rate buy-down fees to get 1% or 2% interest rate for the first one or two years.
The main advantage of FHA 2/1 buy-down loan is that such loan lowers down your initial monthly payments and permits you to qualify for a higher priced home. You are also qualified for a much lower payment if you are trying to refinance an existing mortgage. This buy-down loan gives you the benefit of a low start rate but the full stability of fixed-rate loan.
During the first one or two years, the interest in your loan will increase only a minimum of one percent which will hardly have an adverse effect on your monthly payment. Likewise, you may once again streamline refinance your loan into a fixed-rate mortgage anytime you want.