FHA Home Loans
Denver / Lakewood: FHA home loans are a great option for many home buyers in many situations. There are also many attractive FHA refinance programs in Colorado that can be good options.
For many Denver Home Buyers, FHA Home Loans are an excellent choice for a variety of reasons. For one, the FHA minimum down payment requirement is only 3.5%, making the cost to buy a home affordable for many. FHA loans can be paired with a Down Payment Assistance option such as the popular CHFA program in Colorado to enable home buyers to purchase a home for as little as $1000 out of their pocket.
FHA Home Loans have a reputation for being a first time home buyer program, but they aren’t just for first timers. They are popular for other reasons such as easier underwriting standards, and low FHA mortgage rates.
Here are some of the most common questions we get from prospective Denver Home Buyers about FHA Home Loans.
What is the minimum credit score required for an FHA Home Loan in Colorado?
The minimum credit score requirement for lenders can differ. However, every loan that a lender does has to pass through a system called “automated underwriting” and as the FICO goes lower, it becomes more difficult to get an approval through automated underwriting.
The other consideration with lower credit scores is that FHA mortgage rates are higher with a lower credit score. See next question….
What are FHA mortgage rates?
FHA mortgage rates are generally lower than other loan programs. Fill out our Quick Quote form on the side of this page and we will send you a no obligation quote. However, something to keep in mind with FHA is that there is mandatory mortgage insurance on all FHA loans.
What are FHA mortgage insurance rates?
FHA has mandatory mortgage insurance regardless of how much money you put down. There are two types of mortgage insurance with FHA- up-front and monthly mortgage insurance. The up-front FHA mortgage insurance rate in 2020 is 1.75% of your loan amount, and this mortgage insurance premium is usually financed, meaning you don’t have to bring this money to closing. There is also a monthly mortgage insurance rate.
FHA mortgage insurance continues for the life of your FHA home loan if you put less than 10% down, and if you put 10% or more down payment, then the mortgage insurance can be cancelled after 11 years. It is possible to refinance out of an FHA loan and into a conventional loan once you have 20% or more equity and eliminate the mortgage insurance that way.
I had a bankruptcy, can I still get an FHA Home Loan?
Yes, on a chapter 7 bankruptcy you can obtain an FHA home loan 2 years after your bankruptcy is discharged.
What is the maximum debt to income ratio for an FHA Home Loan?
Debt to income ratio or DTI is a term used to compare your gross income to your monthly debts including the new mortgage payment. One of the advantages of an FHA home loan is that a higher debt to income ratio is possible, so more home owners can qualify.
What is an FHA streamline refinance?
FHA has a special program to roll into a lower rate and payment quickly and easily. The FHA streamline refinance loan requires no appraisal or income documentation. You just have to be employed with a decent credit history.
Can I do an FHA cash out refinance?
Yes! You can do an FHA cash out refinance to pull some of the equity out of your home. The cash out can be used to pay off debts, remodels, or any other reason.
What is an FHA 203K home loan?
An FHA 203K is a renovation program offered through FHA that enables you to finance home improvements. The improvements can be as small as new carpet and paint, up to kitchen remodels, complete guts, or even putting additions on your home!