FHA loans. How is the monthly mortgage calculated?
What is an FHA loans and are they better than a regular loan?
If I am purchasing a house that is 180,000 and i have an FHA loan and the interest is 6% what would be my monthly mortgage?
- glennLv 71 decade agoBest Answer
FHA loans mortgage payments are calculated just like any other loan and you can find calculators all over the Internet.
FHA loans are loans specifically set up by the US government to help people buy personal homes with a small down payment. Usually people put about 3% down. It sometimes is easier to qualify for an FHA loan because of the way they are underwritten.
There is an FHA mortgage insurance that you have to pay in addition to the principal and interest and you always have an escrow account with FHA to take care of the property taxes and homeowners hazard insurance.
On low down payment conventional loans (which is the most common alternative for most people) you will have to put down at least 5% and it will be a little stricter to qualify. You will have a private version of mortgage insurance and you will have to have an escrow account to take care of the property taxes and the homeowners hazard insurance.
The difference is not really in the monthly payment. If you are putting 20% down there is no reason to get an FHA loan, it is only a good loan if you are putting minimum down.
- 1 decade ago
FHA loans are a powerful tool to help first time buyers qualify for a home loan. Although the FHA is not a direct lender, its programs have helped millions of homebuyers buy new homes. Most programs are targeted to younger, first time homeowners, but new programs like FHASecure have also been introduced to help homeowners with adjustable-rate mortgages.
FHA loans are mostly designed for first time buyers; however the FHASecure program is available for homeowners with adjustable-rate mortgages who are at risk of foreclosure. All borrowers, whether they're receiving a new loan or refinancing an old one, must meet the following basic FHA loan criteria:
Have a valid Social Security Number (SSN)
Be a legal resident of the United States
Be of legal age to sign a mortgage in your state.
As with all lenders, you must meet additional requirements regarding your credit history, income, and debt-to-income ratio. The FHA will also consider your down payment plus additional cash for closing.
Unlike most other lenders, the FHA doesn't require you to have a traditional credit history in order to consider your reliability. Instead, lenders can build a credit history based on utility payments, rental payments, auto insurance payments, and other payments that don't appear in credit files.
They will also consider whether you've had a bankruptcy in the last two years. You should have a good history of on-time payments in the last two years and be current on all payments. If you're in default on any student loans, you will not qualify for an FHA loan.
Regardless of the FHA loan limit for your area, the loan amount you qualify for depends on your income and ability to pay. Under FHA standards, you should spend no more than 31% of your monthly income on your mortgage, property tax, and insurance. In addition, you should spend no more than 43% of your income on total debt payments, including student loans, car loans, and credit card debt.
FHA loan standards are much more generous than conventional loan standards, but you must still be able to meet their basic requirements and underwriting standards in order to qualify. Use the FHA's loan estimate tool to determine how much home you can afford.
For a 30 year loan of $180,000 at 6% your monthly payment will be about $1,079.Source(s): http://www.bills.com/fha-loans/
- Kathrina Teebo KLv 53 years ago
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