When it comes to getting a home loan, the FHA loan is one of NH’s most popular. FHA loans are particularly coveted because they have more lenient qualification requirements, partly because the Federal government backs FHA loans. While FHA loans are government-backed loans, they are offered through private insurance companies. FHA loans are an attractive option for everyone looking to buy a home, whether you are a first-time homebuyer or getting your second or third mortgage. With that being said, you should be aware of a lot of things before you go ahead and get an FHA loan. Being educated about FHA loans will allow you to get the correct type of FHA loan that needs your needs.
How does FHA loan Maine works?
The government backs FHA loans; however, a private lender is still giving the mortgage. If someone who took an FHA loan in Maine or anywhere in the US cannot repay the mortgage, the FHA promises to repay the loan. The government’s promise to repay the loan on behalf of the borrower allows borrowers with poor credit scores, low income, and low-down payments to receive a mortgage with lenient mortgage requirements. However, this promise by the government comes at the cost of FHA mortgage insurance. While FHA loan requirements might be relatively reasonable and easy to meet, the FHA mortgage insurance payments have to be paid either upfront or merged into the overall loan amount you have to repay.
What are the key types of FHA mortgages that you can get?
Just like conventional loans, there are different types of FHA loans you can get. Some key types of FHA loans are as follows:
Fixed-rate FHA loans: Fixed-rate FHA loans, as the name suggests, have fixed FHA mortgage rates. You can get a fixed-rate FHA loan with durations ranging between 15 to 30 years. Fixed-rate mortgages also come with low down payment options, so they are an excellent way to get a mortgage for someone who doesn’t have a big enough down payment to put down.
Variable (adjustable) rate FHA loans: Adjustable-rate FHA loans, also called variable rate FHA loans, have interest rates that adjust or change during the loan’s lifetime. While the loan rates usually go up over time, they might come down due to certain factors. There are additional types of adjustable FHA loans, such as one and three-year adjustable-rate loans that remain fixed initially for one or three years but can increase up to one point after the initial fixed period. Five-year adjustable-rate mortgages stay at a fixed rate for the first five years, and the rate starts changing after a five-year fixed term. Seven and 10-year variable loans are set for 7 or 10 years and the rate increases by 2 points after the fixed-rate period.
Section 245(a) loan: This type of FHA loan has monthly payments that increase over the duration of the loan. You can get this loan in three different terms and increasing payment rates.
FHA mobile home loan: You can get an FHA loan for a mobile home by going to a lender or broker such as Nextgen Mortgage.
However, the maximum loan amount for a mobile home is limited to $69,678. If you want to buy a lot instead, the loan limit is $23,226 for a lot, and if you want a lot and mobile home combination, you can get up to $92,904.
