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FHA Loans

Cape Mortgage > FHA Loans
Cape Mortgage > FHA Loans

FHA Loans

FHA Loans are popular for 1st time homebuyers because they only require a down payment of 3.5% and that money can also come from down payment assistance grants.  FHA does not make loans, rather they insure these loans that are made by private lenders. A lot of borrowers feel good knowing their loan is backed by the federal government.  These loans do require upfront mortgage insurance of 1.75% of your loan amount. This is normally financed into your loan. FHA also requires monthly mortgage insurance of .85%.  FHA also makes it easy to refinance an existing FHA loan by allowing a streamline refinance. It is possible to do a streamline refinance without qualifying all over again or getting a new appraisal.
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Get Reduced Interest Rates With an FHA Loan

FHA loans are backed by the government, which means you will get a reduced interest rate. There are specific and strict guidelines that must be followed to be approved for the loan, and Cape Mortgage Inc will help make that process as smooth as possible.

Find out if You Qualify for an FHA Loan

Determining your eligibility for an FHA loan involves specific steps and factors. Having the following information and documents readily available will help make the process move along:

  • Social Security Numbers
  • Credit checks
  • Gross monthly salary
  • Financial information
  • W-2 tax stubs from the last 2 years
  • Personal tax returns

Know the Importance of Your Credit

Credit Score Cash Flow Finance Concept

Your debt-to-income ratio plays a key role in determining whether you are eligible for the loan. Your credit information will tell you what type of home you can afford, based on your income and expenses.

To get an idea of how your credit will factor into your loan, you can take the amount of gross income you receive each month and divide it by the amount of financial obligation. The number you end up with will give you your debt-to-income ratio.