FHA Mortgage Loans
FHA Mortgage Loan Calculator
FHA Mortgage loan calculators are somewhat more complex than their conventional mortgage cousins, as they are also dependent on maximum mortgage limits and and a more complex mortgage insurance calculation.
We will be bringing to you a simple to use FHA mortgage calculator that we have developed and are currently testing.
In the meantime we bring to you a description of how the basic calculation works but remember to check your counties maximum mortgage amount.
Down Payment= Purchase Price x 3.5%
Loan Amount = Purchase price – Down payment
Up front Mortgage Insurance = Loan amount x 1.5%
Final Loan Amount = Up front Mortgage Insurance + Loan Amount
Mortgage payment is Final Loan Amount Payment + ( loan amount x 0.5%)/12
Example:
120,000 purchase
Loan Amount = $115,800
Upfront MIP = $1,737
Final Loan Amount = $117,537
Payment based on 5% Fixed rate.
Payment = $630.96
MIP =$48.97
FHA Mortgage Loan Guidelines
We will also be bringing to you the latest FHA loan guidelines in an easy to understand format which will cover subjects such as:
Documenting source of closing funds and gifts.
Income verification and how overtime and bonus incomes are calculated.
legitimate sources of income and how side job income is calculated.
Seller contribution to closing costs.
reserve requirements.
etc...
It is important to appreciate that the Federal Housing Administration (FHA) provides basic guidelines to mortgagees and guarantees the purchase of the mortgage if the lender follows those minimum requirements, however that does not mean that the lender can not add their own requirements and very often they do.
FHA Closing Costs
We will also be listing here a complete list of all FHA closing costs and explain which parts may be paid by credit card or the seller and which ones are must be paid by the buyer, which may very well effect the cash required to close a transaction.
Applying for an FHA Loan
There are some steps to be taken before applying for an FHA loan in order for the process to go smoothly.
Having sufficient, seasoned funds in the bank account is of outmost importance. it is simply not possible to deposit a large some of money without a legitimate, traceable and documentable trail. The lender obtains a verification of deposit, or three months worth of statements, where a 60 day average balance is reflected, which must be roughly equal to the ending balance.
If gift funds are involved then the lender must see the ability of the donor, by means of obtaining a bank statement showing that the last of the money is not being donated plus a letter from the donor stating that the funds are actually a gift and that no repayment is expected. it is best to copy the gift check and keep the deposit receipt to demonstrate to the lender where that big deposit came from.
