4 Tips for FHA Purchase and Refinance Loans in Montgomery County Maryland by Expert Tim Marose
CHI Publishing
August 19, 2008
What is an FHA loan?
An FHA loan is a home loan from an approved lender and insured against default by the Federal Housing Administration. Lending guidelines on this type of "government" loan are generally more lenient than typical conventional loans. FHA loans allow borrowers to utilize 95% of the value of their homes for refinance and only 3% down payment for purchase transactions.
Do you need perfect credit in order to qualify for an FHA loan?
No! FHA loans are generally easier to qualify for than conventional loans because the loans are insured. Many borrowers with less than perfect credit use FHA to qualify. Strict lending guidelines in 2008 have helped FHA loans increase in popularity. No more than two 30 day late payments in the last 12 months, steady employment in the last 2 years, no bankruptcy in the last 24 months, and a mortgage payment that does not exceed 33% of your income are good rules of thumb.
Can FHA loans be used for both purchase and refinance transactions?
Yes! Both purchases and refinances qualify for FHA loans. Many first time homebuyers utilize the low 3% down payment compared to 10 or 20% with most conventional loans.
What is the loan limit for an FHA loan?
Montgomery County, Maryland currently will allow FHA loans as high as $729,750. Most parts of Maryland will allow loans higher than the previous conforming limit of $417,000.
To find out more about FHA loans for refinance and purchases, go to www.tmmortgagegroup.com or call 1800-696-1424.