FHA Home Loan
With low down payments, low closing costs, and easier qualifying, what's not to like about an FHA loan?
Talk about a great deal!
The FHA (in partnership with UMe!) can grant your homeownership wish even if your credit isn’t excellent and your income isn’t sky-high.
The Details
FHA stands for Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development (aka HUD), in case you’re curious.
The feds guarantee your loan so that credit unions like UMe can grant you a mortgage even if your income or credit is a little on the lower side. It means the good old federal government is quietly confident that you can succeed as a home buyer!
Why You Should Get Excited
Low Down Payment
FHA loans need a down payment of just 3.5% so you can buy a home sooner!
Low Closing Costs
The FHA puts a cap on your closing costs so more of your money goes toward your principal.
Easy Qualifying
Because the FHA insures your loans, you may qualify with lower credit scores and lower income.
FHA Home Loan Rates
|
LOAN TYPES |
TERMS |
APR* |
|---|---|---|
|
LOAN TYPES FHA Home Loan |
TERMS 15 |
APR* TBC |
|
LOAN TYPES FHA Home Loan |
TERMS 30 |
APR* TBC |
Let's set you up for success with the FHA:
Even though the government is involved, applying for an FHA loan is pretty much the same deal as applying for a loan directly from a wonderful lender like UMe. Just show us the most recent or current versions of these documents:
- Photo ID and proof of address so we know who you are
- Bank statements and proof of any other assets (crypto, anyone?)
- Tax returns (finally a good use for these!)
- Pay stubs, W-2s, 1099s, and any other paperwork to do with your earnings
- Gift letters if some lovely person is helping with your down payment
- Evidence of your renting history or any other time you’ve owned a home
- Credit history – we can ask FICO for your credit report and you can too!
6 simple steps to prepare for an FHA loan:
Spend a few minutes (or days!) gathering all the documents and information mentioned above.
Do a little research online (or talk to us!) and confirm you check all the boxes for an FHA loan.
Once you’ve chosen your home loan path, you can choose to apply online, over the phone, or in-branch.
The friendly folks at UMe will take a look at your details and give you an answer, and maybe ask for more info.
Let’s just assume we can pre-qualify you for an FHA home loan – now you can start house hunting!
Once your offer is accepted, we can guide you through the closing process, including FHA home appraisal.
2 great payment options, the choice is yours!
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Payroll Deduction
If you have a loan with the credit union, payroll deduction is a convenient way to have your loan payments automatically deducted from your paycheck.
To find out if you’re eligible for payroll deduction, contact your employer’s benefits department. If you already have payroll deduction set up with the credit union and want to set up automatic loan payments, call us at (818) 238-2900.
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Automatic Transfers
Automate transfer allow members to transfer funds within UMe accounts on a recurring schedule.
You can set up an automatic transfer to make your loan payment, so you won’t have to think about it each month.
To set up an automatic transfer, fill out our Share to Loan Transfer Form or give us a call at (818) 238-2900.
FHA Home Loan FAQs
Because FHA loans are backed by the Federal Housing Administration, we can get great loans to awesome people like you who may have lower credit scores or patchy credit history.
Basically, if it turns out you can’t pay your mortgage (not gonna happen, we know!), the feds promise to give most of the money back to the lender that financed you to buy your home. This guarantee means we can offer you a loan even if your credit or income isn’t quite as high as you might want at the moment.
Here are the really great things about FHA loans:
- Down payment as low as 3.5%
- Limited closing costs
- Easier qualifying
- Can be used for your first home or you can be a repeat buyer
There’s a bit of magic involved in rates. We put everything into a pot, stir it three times, then pull out your lucky number! (Actually, your credit score will determine your rate. The higher your score, the lower your rate.) Also, the term you choose will impact your rate. Shorter terms get lower rates!
Note that your annual percentage rate (APR) is your interest rate plus any applicable fees rolled into one handy figure.
Generally speaking, yes. But your choice of terms might depend on your particular financial situation. Just ask UMe and we’ll guide you in the right direction!
Keep in mind that a longer loan term means a lower monthly payment but you’ll pay a bit more in interest. Of course, short terms mean the opposite. You’ll save on interest but your monthly payment might stretch your budget.
It’s funny you asked because FHA loans do tend to come with a couple of footnotes. So here’s the thing:
- You need to pay a monthly insurance premium (MIP) no matter how big your down payment is
- MIP is usually rolled into your APR as part of your monthly payment so you’ll barely notice it
- You also need to pay an Upfront Funding Fee that can be rolled into your loan principal – or you can pay in cash
If you’re wondering what these extra fees are for, they’re to help with that government guarantee we talked about earlier – so the lender can stay cool as a cucumber knowing they’re covered in case you can’t make your payments. The fees are a way for you to split the bill with U.S. taxpayers (like yourself!).
That’s a very good question! Closing costs pay everyone who has a hand in your home loan, including:
- Your local friendly lender
- Real estate agents
- Lawyers (if needed!)
- The people who handle titles and other expert admin
- Taxes and fees you have to pay in advance and leave in a cool account called Escrow
- Appraisals, inspections – honestly, the list goes on.
But lucky for you, the FHA limits the amount you need to pay in closing costs so your home loan is more affordable and you can get settled in soon.