A mortgage backed by the Federal Housing Administration is a great option for first-time homebuyers looking for a low down-payment mortgage.
What is an FHA Mortgage Loan?
FHA loans are mortgages that are insured by the FHA. They allow homebuyers to purchase a home with a down payment of as little as 3.5% of the purchase price.
They are popular with those purchasing a home for the first time because they tend to have more relaxed credit requirements than conventional mortgages and offer long-term mortgages at fixed interest rates. They are sometimes referred to as first-time homebuyer loans.
It is worth noting that all FHA mortgages require mortgage insurance premiums (MIP) which insures the lender in case the borrower defaults on the mortgage.
Your first MIP payment would be 1.75% of the entire loan. The annual MIP payment is based on the amount of your remaining loan and your mortgage term (how much time you have left to pay off the loan).
Is an FHA Loan Right for You?
You have plenty of options when considering a home mortgage.
If you’re not sure whether you need an FHA loan, a conventional loan or something else, just contact us online or visit one of our 10 Union Bank branches in West Central Arkansas and the River Valley: Mena, Paris, Wickes, Hatfield, Caulksville, Clarksville, Ozark, Waldron, Booneville, and Russellville.