Home loans insured by accepted lenders can benefit buyers to a great extent. Those with less than perfect credit can also benefit from ideal house rates.
To refine the housing market, the Federal Housing Administration (FHA) backs these home loans to support home buyers borrow investment money and protect lenders from borrower default. FHA’s loan programs include options regarding purchases, refinancing, special renovation project financing, as well as reverse mortgages.
e-Finance Mortgage LLC holds the privilege of being one of the leading loan services offering competitive FHA loan rates in Colorado.
Colorado FHA Loan Requirements
- A credit score of 580 is the minimum credit required for minimum payment qualification and eligibility. Individuals with a score over 500 but lower than 579 may still qualify, but a higher down payment (up to 10%) may be required.
- 3.5% of the purchase price is the minimum down payment available. The payment percentage may be higher if a borrower’s credit score is lower than the required score.
- A DTI (debt-to-income) ratio of 43% or less is required for the Colorado FHA loan. In special circumstances, up to 50% of DTI ratio may be approved.
- All properties in Colorado must meet specific safety and structural soundness standards.
Loan limitations vary according to county. High-cost areas in Colorado call for loan limits from $271,000 up to $636,500.
Borrowers who acquire FHA loan in Colorado must pay two different mortgage insurance premiums (MIP):
- 75% of the purchase price is the up-front premium (which FHA auto-adds to your total mortgage amount)
- Monthly payments, which serve as parts of total mortgage payment. These fall between .45% and 1.05% of yearly mortgage balance. A number of factors determine these premiums, such as overall loan amount, loan-to-value (LTV) ratio, and the mortgage length.
Colorado FHA Loan Benefits
Homebuyers with first-time property investment experience in Colorado gain the convenience of low credit score and down payment requirements.
First-time homebuyers with a credit score of 580 may be able to qualify for FHA loan with only 3.5% down payment. Homeowners with existing FHA loan can opt for the cash-out refinance loan, and may be able to avail streamline refinance options.
If a home buyer wants to take on a rehabilitation project, they can apply for the FHA 203k loan. This allows the borrower to incorporate both purchase and renovation costs into single mortgage.
e-Finance Mortgage LLC provides financing for both first-time home buyers or current home owners in Colorado through initial or refinancing FH Loans. If you want to avail competitive rates and terms on different FHA loans, contact us today to start the application process.