Want to know about FHA Loans and Colorado Mortgage Rates?

If you’re a first-time homebuyer or a subsequent homebuyer with less-than-perfect credit, you may consider an FHA loan. It’s one of the most flexible loan programs for anyone who doesn’t qualify for conventional financing and can be a great way to buy a home.

The FHA loan not only has flexible guidelines, but it has some of the most competitive Colorado mortgage rates today, making it an even more attractive option.

If you aren’t familiar with FHA loans, here’s everything you must know before you apply.

FHA Qualifying Requirements

You don’t need to make a specific amount of money or be in a certain category to qualify for an FHA loan. If you meet these requirements, you could be a good candidate whether you’re a first-time homebuyer or not:

• Minimum 580 credit score
• Maximum 43% total debt ratio (your monthly debts compared to your gross monthly income)
• Stable income and employment for the last 2 years
• Proof you’ll occupy the property as your primary residence
• At least 3.5% down payment (maybe a gift)

How FHA Loans Work

FHA loans work just like any other mortgage loan. You work with a lender to prove your worthiness of the home and prove that the home itself qualifies too. Here’s the process:

• Complete a mortgage application
• Provide proof of your income, assets, and employment
• Provide any other documents underwriting requires
• Get pre-approved for the loan with Colorado mortgage rates today
• Look for a home within your budget
• Put in an offer and sign a sales contract
• Submit the contract to the underwriter
• The underwriter orders the appraisal and title work
• Receive final approval
• Close on the loan

As you can see, there are two important factors when qualifying for an FHA loan – you must qualify personally, but so must the property. The appraisal and title search determines a home’s eligibility for FHA financing.

FHA loans don’t have strict guidelines for the collateral, but they must ensure the home is worth at least as much as you offered to pay and that there are no liens on the property except the seller’s current mortgage.

FHA Mortgage Insurance

As you look at your mortgage options, know that FHA loans require mortgage insurance for the life of the loan. This is how we can offer some of the best FHA Colorado mortgage rates today. The mortgage insurance protects the lender should you default on the loan.

The mortgage insurance amount decreases as you pay your mortgage balance down, but it protects lenders from a total loss no matter what point of the mortgage you are in.

Final Thoughts

If you’re thinking about buying a home but don’t have great credit, consider an FHA loan. I’d be happy to help you understand how it works and to see if you qualify. I’ll help you get some of the best Colorado mortgage rates today, keeping your mortgage payment down and making it easy to secure financing to buy your first or subsequent home.

This was our brief rake on FHA Loans and Colorado Mortgage Rates Today. For any questions let us know!

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