Federal Housing Administration (FHA) mortgages are popular among first-time homebuyers, but are not limited to first-time homebuyers. Many borrowers choose an FHA loan due to the lower down payment requirements and more flexible underwriting guidelines.
Bank SNB has an underwriting team with delegated FHA loan approval authority, meaning your loan file is reviewed and approved by Bank SNB staff, not sent off for review by an underwriter thousands of miles away. This allows for quicker decisions by experts who know the markets we serve.
FHA loans typically only require a minimum down payment of 3.5% (compared to a 5% minimum with conventional financing), and in most instances, they allow you to finance the required upfront mortgage insurance premium into the new loan amount. FHA underwriting guidelines also typically allow borrowers more flexibility when it comes to debt-to-income ratios, gift funds for down payment and closing costs. And if the borrower needs help qualifying, FHA loans may allow a parent or relative to co-sign.
There are some differences between FHA financing and conventional financing, however. FHA financing requires the property to be the borrower’s primary residence and has strict guidelines as to the condition of the property. Monthly mortgage insurance premiums are also typically higher and must be paid for the life of the loan with FHA financing.
Whether you are considering purchasing a new home or deciding if it’s the right time refinance, use our calculators to help you make your decision. Explore our helpful resources to answer many of your mortgage questions, or talk with one of our loan officers to determine the mortgage that’s right for you.