Consumption and Real Estate
are FHA home loans as Peachy as they sound?
Question : are FHA home loans as Peachy as they sound?
Im 21 years old 30,000 income and plan on buying a home in 2years with my wife and son. I plan on having 15,000$ before entering process. FHA loans look like the choice for me since im a first time home buyer and dont want to put 20,000 down for conven.loans i want a 200,000 $ home here in alaska and the fha limit for the area is 268,000 what are the strict rules of fha they most people dont know before going through the process. basically any info you guys can give my so i can walk in the office one step ahead well prepared. thank you
fha home loans
Best answer:
Answer by Real Estate Guy
if your income is 30k, forget about the 200k house. you qualify for a 90k loan.
Yes they are! FHA loans are fantastic for first time homebuyers. You will need to put down 3% of the purchase price, or at least have 3% into the transaction. Meaning if you are paying your own closing costs, then 2.25% can be the down payment and .75% can be used toward closing costs. The amount you finance in your example would be about $ 195,500.00 with your contribution of $ 6000.00. You will need to document everything, so be prepared by bringing your last 2 years of W-2′s, 2 months worth of bank statements to show where the money is coming from and your most recent paystubs for the most recent month. Your payment for Principal and Interest will be around $ 1254.32 at an interest rate of 6.5% for a 30 year mortgage. You will also need to pay taxes and insurance as well as mortgage insurance, so your total payment will be more. Also, you will have the option to pay upfront the Mortgage Insurance one time premium or you may roll it in, meaning add it to the principal loan amount. Typically you will need the money for other things, so I would suggest rolling it in. It is 1.5% of the amount financed and the monthly Mortgage Insurance Premium is 0.50% of the financed amount worked into a monthly payment. Now that brings your payment for Principal and Interest and Mortgage Insurance to about $ 1337.00. Now if you know the taxes on the property, take the annual figure and divide by 12 to get your monthly tax amount and do the same with your Home Owners Insurance annual premium and add that to the $ 1337.00 and you will have a good idea of the payment. Looking at the income though, it will be a tight fit. FHA allows for the standard of 28% of your gross monthly income for the housing payment, depending on the taxes and insurance and $ 30,000.00 annual salary, your ratios would be a little high, over 50%, which is not typically approvable for FHA financing. I would work on more income and or a larger downpayment. You are doing the right thing to plan ahead and I hope this helps.
Good Luck to you and your family and happy house hunting!