FHA’s loan requirements 2018 [Updated]

– I’m gonna tell you the requirements to get an FHA loan in 2018 and it’s coming up right now..


– I’m gonna tell you the requirements to get an FHA loan in 2018
and it’s coming up right now. (snaps) (upbeat music) (ding) (upbeat music) Hello and welcome. If this is your first time on my channel, my name is Matthew Tortorelli and I’m a mortgage loan officer in
California, Arizona and Texas, and this, and if you like great content like this, consider subscribing. Now, let’s get into it. So, you are looking to buy a house and you heard about all the
fantastic opportunities that await you with FHA,
and you want to know a little bit more about it, so let’s get into it, okay? First off, I’d like to take a minute and I’d like to look
at the main competitor to FHA, which would be conventional, and I’d like to just go over a couple of points that’ll help us understand the pros and the cons
with FHA even more, okay? So, the first thing I wanna
talk about with conventional is your mortgage insurance
will drop off all on its own without you needing to go
through any type refinance with conventional if you
put less than 20% down. With FHA, you will have
to go through a refinance to remove the mortgage insurance because it never goes away on its own, okay? So that’s the first
point I want you to know about FHA versus conventional. Next thing-the interest rate. Assuming you have a 740 plus FICO score is very competitive
with FHA, we’re talking very similar rates, they’re assuming you have great credit on
the conventional side. Now, let’s talk, let’s go, let’s intro FHA real quick, okay? So now that we have a basic understanding of why or why not someone
would want to go conventional over a FHA for their home
loan, let’s go over some of the parts of FHA that
make it one of the best, most affordable, easy
accessible loans here in the United States, okay? First off, higher debt-to-income ceiling. So if you have debt right now,
if you have student loans, if you have car loans, if you have spouse or child support, if
there’s debt saddling you that you can’t pay off, or it doesn’t make sense to pay off, or
you, or it’s in your life and you can’t qualify
for the amount of house you want on the conventional side, switch over to the FHA side. They have a higher debt ceiling, you’ll be able to qualify for more
home with the same income. So if you didn’t get as much as you wanted on the conventional
side, try going over to the FHA side, and you’ll be surprised, you’re looking at a higher ceiling of what you can afford, okay? So now, let’s talk
about your credit, okay? So, what is stellar credit? Let’s get that definition out of the way. Stellar credit is
anything with a qualifying score over 740, okay? So if you have less than stellar credit and you don’t have 20%
to put down on a house, I’m gonna make this real simple. You should probably be going FHA, okay? You probably should not
be going conventional if you have under a 700 credit score. And really, you’re gonna
start losing ground as soon as you go, as
soon as you go under 720 you’re gonna start losing ground to FHA. But a lot of people would
rather, would just feel safer conventional, so I’d say if you really are hell-bent
on going conventional, as long as you have at
least a 700 FICO then it’s gonna make sense for you. But if you’re under that
700 mark, and it doesn’t make sense for you to wait any
longer to get in your house, don’t be afraid to go FHA,
you’ll be in that loan for as long as you need to be,
until your credit gets better and then we can refinance
you conventional, okay? So that’s always an option down the line, but don’t lose out on that
house that you want today just because you don’t
feel comfortable going FHA. FHA’s not a bad loan, it’s
just the mortgage insurance never drops off, and it’s
gotten a bad rap for that. So that’s just something
to keep in mind, okay? Now, (rustling) bonus tip, okay? I’m gonna have to read
this one off the page, cause I had to write this, okay? So, a lot of people know
that if they put less than 20% for their down
payment, they will have to pay some type of mortgage insurance. Well, what a lot of people do not know is that with conventional,
okay, in general your mortgage insurance,
the percentage that you pay is gonna be lower than FHA. For instance, mortgage
insurance, just like your interest rate, is
expressed in a percentage. With FHA, it’s .85% of the loan amount divided over 12 months, and
you pay that every year, okay? And that’s your FHA
mortgage insurance rate. Now with conventional, if
you have stellar credit, 740 plus, you might be at .55 or .46 on your mortgage insurance, so that’s also something to keep in mind
if you’re considering interest rates, FHA versus conventional. Also look at the mortgage
insurance rate that you’re getting with
your conventional loan. Thank you so much everyone for watching. Please make sure you
smash that like button and leave a comment below. I will be there to
continue the conversation. And if you like this
content, please make sure to subscribe and follow me on social media. That’s Instagram @the_mortgage_don and Facebook as Matthew
Tortorelli, Loan Officer. Thank you again and have
a great one, everyone.

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