FHA Loans Southern California

An FHA loan California insured by the Federal Housing Administration (FHA) is a type of a mortgage loan. In the 1930s, FHA program in California was created as a result to all the foreclosures that happened at that time. FHA loans in California are devised for borrowers who are unable to make vast payments at one go. Compared to other emblematic loan plans first time home buyers are readily qualified for a FHA loan in California.

FHA loan in California is one of the easiest to qualify among all the other loan schemes, even if you have less stellar credit you can easily qualify for the FHA loans. Upon that FHA loans also requires a low down payment .For FHA loans in California, 3.5 % of down payment is required for maximal financing.

People with stellar credit as below as 400 or have borne a bankruptcy may still be apt to qualify for an FHA loan in California. FHA loans in California is the best option for people who doesn’t get approved for private mortgage loans or for those who cannot afford even a 15 % of down payment.

To get an FHA loan in California a lender must be approved by the federal housing authority to support any borrower. Apart from that, FHA loans in California require that the house meet certain conditions and must be appraised by a Federal Housing Administration approved appraiser.

Your Debt to Income ratio is also plays an important role in getting FHA loan qualified. The lenders basically look at your DTI ratio before lending you any money. Lenders need to know that you can meet all monthly obligations.

Apart from the stellar credit scores and adequate down payment funds, there are other criteria for a person to qualify for the FHA loan in Southern California. US Department of Housing and Urban Development has set certain rules and regulations that need to be pursued in order to get a FHA loan in Southern California. A minimum of 500 stellar credit score is required for a person to get an FHA loan, although even if you have less credit score than that does not necessarily mean that you are not qualified for an FHA loan.

Does Mortgage insurance required for FHA loan?

The answer to that query is, yes. An FHA loan in California primarily requires two set of mortgage insurance premiums:

One is UFMIP that is upfront mortgage insurance premium: UFMIP is a onetime upfront monthly premium payment. For UFMIP, the borrower will have to pay a premium of 1.75 percent of the loan.

Other is MIP : MIP is charged monthly that will be figured into your mortgage payment .Based on the Loan to Value ratio the borrower have to pay the mortgage insurance premium . It is a peculiar part of the loan amount.

The extent of the annual Mortgage insurance premium depends on the Loan to Value ratio and also on the restitution term.
FHA loans in California grow into a more attractive choice among the lenders and borrowers because of its favorable loan terms, greater loan limits and adjustable down payment options.   So, whenever you are considering for a loan plan just take a closer look at the FHA loans.