FHA Home Loan Options In Orange County
What is an FHA Mortgage or Loan?
FHA mortgages are insured by the Government, specifically the Federal Housing Administration (FHA). These types of mortgages are available to homebuyers who may have lower credit scores or be interested in making smaller down payments than on typical conventional purchase loans or JUMBO loans.
Because of the less strict approval requirements needed to secure FHA financing, FHA loans are very popular with younger or first-time homebuyers (over 80 percent of FHA loans in 2020 were taken out by first-time homebuyers). Even though the FHA is a government entity and insures these loans, the loans themselves are actually provided by third-party mortgage lenders like us here at .
Think an FHA loan for a new home purchase in Orange County is the right type of mortgage for you? Contact us today to see what level of FHA financing you’re eligible for.
Frequently Asked Questions About FHA Loans
FHA Loan VS. Conventional
Both conventional and FHA loans are available to first-time homebuyers. There is a common misconception that conventional loans are only offered to those who have purchased homes before, but they’re available to everybody. With that said, FHA loans in Orange county are incredibly appealing to first-time homebuyers because of the government-backed insurance and lower requirements for approval. Here are some of the key differences to keep in mind:
| FHA | Conventional |
|---|---|
| Insured by Federal Housing Administration | Not insured by a Government entity |
| Require a minimum down payment of 3.5% for borrowers with credit scores of 580 or higher | May allow as low as a 3% down payment, but only for applicants with credit scores in the high 600s+, with significant income and savings |
| Debt-to-income (DTI) ratio must be 50% or less to qualify | DTIs of 43% or less in most approval cases |
| Mortgage insurance is required regardless of down payment amount | Borrowers are required to pay for mortgage insurance if their down payment is less than 20% |
How to Get an FHA Home Loan in Orange County
We’ll need to take a comprehensive look at your financial situation to determine what type of loans and terms you’re eligible for so you can purchase your new home in Orange County. Our team at will ask you to provide us with your proof of income and other financial documents. You will need to be able to put down at least 3.5% towards the home, have a minimum credit score of 580, and a DTI of less than 50% percent.
Is down payment assistance available for an FHA Mortgage?
Yes, down payment assistance is available for an FHA mortgage. The Federal Housing Administration (FHA) does not provide the assistance directly, but there are several programs offered by state and local governments, as well as non-profit organizations, that provide down payment assistance for FHA borrowers. Some of these programs offer grants or interest-free loans to cover the down payment, while others may provide a second mortgage to be used for the down payment. It's important to note that these programs have different eligibility requirements and conditions, such as income limits, credit score requirements, and residency restrictions, among others. To find out if you're eligible for down payment assistance, contact us today!
How do I get pre-approved for an FHA loan?
According to the FHA’s pre-qualification requirements, you’ll need to demonstrate:
- Consistent employment history with at least two years of steady employment from the same employer.
- Stable income (proof that you can make payments)
- Solid credit over the last two to three years
- No bankruptcy reports on record within the last two years
- No foreclosures within last three years
- And more
Want help getting pre-approved for an FHA loan so you can get started on scouring for a new home?
Contact us today to get started.
What are the options to refinance an FHA mortgage?
There are several options to refinance an FHA mortgage, including:
- FHA Streamline Refinance: This is a quick and easy refinance option for FHA borrowers that requires minimal documentation and underwriting. The FHA Streamline Refinance does not require an appraisal, and the credit and income requirements are usually less strict than a traditional refinance.
- FHA Cash-Out Refinance: This option allows FHA borrowers to refinance their mortgage and take out cash from their equity. The cash can be used for any purpose, such as home improvements, debt consolidation, or other expenses.
- Conventional Refinance: If you have a solid credit score and a low debt-to-income ratio, you may be eligible for a conventional refinance, which will help you remove your mortgage insurance and lower your rate and payment.
Want to apply for an FHA loan? Get in touch with our team of -based FHA loan experts to see what next steps you need to take to qualify for your new home loan.
