For an FHA loan, Colorado residents come to Integrity First Financial. Backed by the Federal Housing Administration, an agency within the U.S. Department of Housing and Urban Development, borrowers pay for mortgage insurance on FHA loans, which protects the lender in the event the borrower defaults on the loan. Because of that insurance, lenders often offer FHA loans at attractive interest rates and with less stringent loan requirements than traditional home loans.
An FHA loan is a good option for those with less-than-perfect credit. Borrowers with a credit score of 580 or higher can get a mortgage with a down payment as low as 3.5% of the purchase price of the home. For those with credit scores between 500 and 579 down payments must be at least 10%.
One of the unique elements of FHA loans in Colorado is how they can be given, While FHA borrows can use their own savings for the down payment, that payment can also be made as a gift from a family member or a grant from a state or local government down payment assistance program.
Another attractive feature of the FHA loan is it allows home sellers, builders, and lenders to pay some of the borrower’s closing costs. While this can be an incentive to purchase a home, lenders that agree to pay closing costs typically charge a higher interest rate.
With an FHA loan in Colorado, the borrower must pay mortgage insurance. There are two parts to this insurance. The first is an upfront premium of 1.75% of the loan amount. The second is an annual premium, although it’s paid monthly. The annual premium varies depending on the length of the loan and the initial loan-to-value ratio (LTV).
- 15-year loan, down payment (or equity) of less than 10%: 0.07%
- 15-year loan, down payment (or equity) of 10% or more: 0.45%
- 30-year loan, down payment (or equity) of less than 5%: 1.35%
- 30-year loan, down payment (or equity) of 5% or more: 1.3%
While terms of an FHA loan in Colorado may seem overwhelming, the experts at Integrity First Financial will be happy to walk you through the entire process, even coming directly to your home to discuss terms, payment programs, and more.
The FHA has a special loan product they offer borrowers who need extra money to make repairs on their homes. Known as a 203(k) loan, the chief advantage of the loan is that it is based on the future appraised value of the home once the repairs are made, rather than the current appraised value of the home at the time of the loan. This streamlined loan allows the borrower to finance up to $35,000 in non-structural repairs.
Borrowers of an FHA loan in Colorado who have incurred a serious financial hardship and are struggling to make their payments can be offered financial relief from the loan servicer. Such relief may be a loan modification that would lower the interest rate or extend the term, a temporary forbearance, or a deferral of part of the loan balance at no interest.
For more information on these or other types of home loans, please call or email Integrity First Financial at (719) 385-0777 office, (719) 360-3767 mobile, or vic@integfirst.com.