Boston MA FHA Loan Program Guidance

FHA is a loan program where mortgage insurance is provided by the Federal government. Most major banks offer FHA program options. Although the program is often utilized by first time home buyers, it is not solely offered to first time buyers. This article provides Boston MA FHA loan program guidance and pre-approval recommendations to help you determine whether it is a loan program that you should consider.

Advantages Of FHA Financing

There are a few notable advantages of FHA financing. The required down payment for an FHA mortgage is 3%, which satisfies Boston MA buyers who do not have a 20% down payment. FHA loans also allow buyers to receive money for down payment and closing costs as a gift from a family member. An additional benefit of is the streamlined refinancing option that allows a refinance to a lower interest rate without getting a current appraisal, useful during declining markets. Finally, FHA programs are assumable, meaning that when you go to sell the property, a buyer can take over your mortgage at the existing interest rate. This can be a big selling point when interest rates are high.

Downsides Of FHA Financing

There are advantages of FHA financing to keep in mind. The private mortgage insurance (PMI) on an FHA loan is often higher than a conventional loan. There is an up-front large fee and a repeating fee due with each payment until the loan is paid down below 80% of the purchase price (or updated appraised value). For Boston MA condominium purchases, the condo features must meet certain requirements such as minimum reserves and minimum owner occupancy rates. Converted Boston MA multi-family buildings and duplexes are therefore difficult to get approved. Boston MA single family houses must also meet certain requirements geared towards safety matters.

FHA Pre-approval Recommendations

Before applying for an FHA pre-approval, review your credit report and address any mistakes. Also obtain important financial paperwork such as bank statements, tax returns from previous years, recent pay stubs, and investment account statements. Lenders will usually ask for a copy of these items. Ask a mortgage professional to obtain estimated monthly payments (based on a specific purchase price and your financial qualifications) and closing fees before proceeding too far in the process.

Boston MA FHA Loan Program Guidance

FHA makes buying a home achievable for some Boston MA home buyers who may otherwise not qualify for a mortgage, so it is a great alternative to consider. The particular advantages that it offers also makes refinancing and selling a home easier in the future. However, it does have disadvantages with the higher fees and property-specific requirements, so not everyone can or may want to use an FHA loan program. Consider the downsides of FHA financing and the advantages of FHA financing detailed in this Boston MA FHA loan program guidance blog and speak to an expert before making any decisions.

About Scott Beard

Finding the right Realtor can be the difference between a happy, stress-free home buying or selling experience, and an unhappy, stressful experience. That’s why choosing the right Agent to begin with is key. I have helped hundreds upon hundreds of clients during my career and sold over $55 million in properties and look forward to putting my experience to work for you.
Contact me at any time. I look forward to hearing from you.

Ask Scott...

* indicates required field