• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Sonoma County Mortgages

Contact Us About Mortgage Financing

All financing provided by New American Funding

(707) 217-4000 | Prequalify Now

Search Sonoma County Mortgages

  • Home
  • Purchase
    • How Much Down Payment To Buy A Home?
    • How Much Income You Need To Buy A Home
    • How Much Should I Save For Buying A Home?
      • How Rates Affect Payment
    • No PMI Mortgages
    • FHA Loans
    • Sonoma County Disaster Loans
    • Jumbo Loans
  • Refinance
    • Mortgage Rates
    • Does It Make Sense To Refinance?
      • Get Your Refi Paperwork In Order
    • How To Pay Off Your Loan Faster
    • How To Remove PMI
    • How Lenders Price & Quote Loans
  • Loan Programs
  • Payment Calculator
    • Mortgage Affordability Calculator
  • Blog
  • Videos
  • About SCM
  • About Scott Sheldon

Primary Sidebar

Sonoma County Mortgages is a part of New American Funding

New American Funding - NMLS #6606

Get Your Latest Rate Quote Now!

All about FHA Loans for 2020 and beyond

July 3, 2020 by Scott Sheldon

Share on Facebook Share on Twitter Share on Pinterest Share on LinkedIn Share on Email
FHA LOANS for 2020 and beyond to buy or refinance

One of the most popular mortgage loan programs continues to be popular especially amongst first time home buyers is the FHA loan. FHA Loans can help bridge the gap between renting and owning an offer numerous benefits. It is prudent as an informed consumer to know the mechanics of how FHA Loans work and all the pros and cons so you can best decide what is in your best interests for you and your family…

FHA Loans are loans that are insured by the Federal Housing Administration which is backed by Hud. The FHA insures the loans the lender originates if the borrower does not make the mortgage payment. This insurance is paid for in two forms of extra loan costs. There is an upfront mortgage insurance premium at 1.75% of the loan amount typically, financed can be paid for in the form of cash. Additionally, there is a monthly premium at .85% of the loan amount before the 1.75% premium is financed.

Here is an example

Purchase price $650,000

Down payment 3.5% $22,750

Loan amount $627,250

Upfront mortgage insurance premium 1.75% $10,976

Financed loan amount $638,226

Annual mortgage insurance premium based on an original base loan amount of $627,250- $5,331 per year divided by 12 is $444 per month.

Important considerations when deciding to go with an FHA Loan

FHA Loans are incredibly flexible and only require a 3.5% down payment. You can also get an FHA Loan just two years after Chapter 7 bankruptcy and three years out of a short sale or a foreclosure. This makes FHA Loans particularly favorable if you have a less than perfect credit situation.

If you put down just 3.5% the PMI is permanent and you cannot get rid of the PMI unless you put down 10% equity and 10 years have passed and 20% equity and then you can petition out of the PMI at that point in time. Anything less than 10% down on an FHA loan the PMI is permanent and the only way out of the PMI to sell the property or refinance into a different type of mortgage such as a conventional loan for example.

FHA Loans do not contain prepayment penalties and most banks, but not all will go down to credit scores as low as 620 some mortgage companies such as New American funding for example will do an FHA loan all the way down to a 580 credit score for a purchase. Not all mortgage companies have these types of credit score requirements, so it is important that you get this information with whatever lender you are interviewing to handle your home financing needs.

FHA Loans in the State of California and other states that are specifically community property states have a little nuance if you are a married couple. So if you are on the mortgage and your spouse is not on the mortgage and you live in a community property State any and all debt that you have and your spouse carries is considered joint meaning the lender has to pull a copy of the credit report for your spouse even if your spouse is not on the loan and any debt that your spouse carries will be factored into your debt to income ratio when using an FHA loan to get qualified.

FHA Loans contain lower interest rates than conventional financing, you are hearing that correctly. The reason why is because the FHA Loans are pricey given the extra mortgage insurance as we discussed above.  It is not uncommon right now to see some 30-year mortgages on FHA Loans under 3%.

An FHA Loan can if done be wonderful affordable way for a family to finance a home whether for buying a home or refinancing home. FHA Loans are also not restricted to first time home buyers only.

Looking to get a low-cost affordable mortgage? Get a no-cost quote and qualification today!

 

 

 

 

 

Related Mortgage Advice from Scott Sheldon

  • Understanding FHA Home Loans

    The two types of loans offered by a local mortgage lenders are conventional loans and…

  • How FHA Home Loans Work

    How do FHA Home Loans Work? FHA Home Loans are the most popular loan program…

  • FHA Home Loans: Mortgage Insurance Premiums Set To Rise!

    Thinking about purchasing or refinancing using the Sonoma County mortgage? If yes, the mortgage insurance…

  • FHA Mortgage Rates Vs. Conventional Mortgage Rates

    Searching for a home financing? If yes, consider the most common types of mortgage loans…

Filed Under: Uncategorized Tagged With: buying your first home, FHA 3.5%, FHA Loan Limits, FHA streamline refinance, Santa Rosa mortgage, Santa Rosa mortgages, shopping mortgage rates, Sonoma County home loans, Sonoma County Mortgage Rates, sonoma county refinancing

Get Sonoma County Mortgages News and Updates in Your Inbox

Footer

SCM on Facebook

SonomaCountyMortgages.com

Connect on Facebook

SCM On Instagram

Follow Sonoma County Mortgages on Instagram

Follow on Instagram

SCM on Zillow

Zillow Reviews for Scott Sheldon, New American Funding

See Reviews on Zillow

Location & Contact

Sonoma County Mortgages and New American Funding are an Equal Opportunity Housing Lender

Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
2455 Bennett Valley Road C107
Santa Rosa, CA 95405
1-707-217-4000
View SCM Map | Email Us!

Map of Sonoma County Mortgages New American Financing Office

View Map on Google

Copyright 2010–2023 SonomaCountyMortgages.com · About Us · Sonoma County Loans · Privacy Policy · Terms Of Use · Legal · Site Map

NMLS Consumer Access © New American Funding. All rights Reserved. NMLS ID#6606.
Corporate Office 14511 Myford Road, Suite 100, Tustin, CA 92780. We at New American Funding take great pride in our customer service and make it our number one priority. We encourage you to contact us for complaint resolution or any post-closing questions you may have regarding the servicing of your loan. We strive to have your experience with New American Funding a stellar one. In the rare case that our service did not meet your expectations, please call our customer care hotline at 1-800- 450-2010, ext. 7100 or you may contact us by email customerservice@nafinc.com. Please leave a detailed message and we will follow up with you no later than the end of the next business day. If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-450-2010 Ext. 7100 for assistance.

State Licensing (Opens in New Window) | Privacy (Opens in New Window)
Terms of Use (Opens in New Window) | Electronic Consent Agreement (Opens in New Window)
Opens in new window Opens an external site Opens an external site in a new window