How FHA Loans Can Help You
The Federal Housing Administration is the largest insurer of mortgages in the world. They offer the most competitive loans for first-time home buyers and those who are budget-conscious. The FHA guarantees the loan which means that they promise to pay lenders if a borrower defaults on an FHA loan. To fund this, they charge borrowers a fee called a mortgage insurance premium. There is an upfront cost and an ongoing monthly fee which can be refinanced.
Benefits of FHA loans
- FHA mortgage rates are very low
- The loan is assumable
- No prepayment penalty
- Gifts can be put towards the down payment and closing costs
Review the FHA loan guidelines:
- The minimum down payment is only 3.5%.
- The minimum credit score is 580.
- There is no minimum income requirement.
- The FHA loan limit for a single-family home in San Diego is $562,350.