The FHA will back any mortgage loan known as the FHA loans. These loans are characterized by a small down payment and minimal credit requirements when compared to traditional mortgages. An FHA mortgage has an upper limit for the mortgage, which is specific to where the property is located in New York. Due to the extensive cost of living in New York, as well as a higher cost of living, FHA loan limits are more here than the majority of the country.
An FHA loan has a 30-year term with a fixed rate similar to a traditional mortgage. Three components make up the FHA mortgages:
- a low requirement for credit scores
- only 3.5 percent for the down payment
- and mortgage and upfront insurance for the loan of more than 78 percent.
Monthly mortgage payments are assessed until such time as the loan equals 78 percent of the value of the home. A borrower can qualify for these mortgages when they are only two years out of a Chapter 7 bankruptcy or one year out of a foreclosure, as long as the remainder of the credit file is positive.
If you are looking to get one of these loans, you need to have two credit lines open minimum. For those who don’t have any credit file, utility bills or rental payments can also be used. Prospective mortgage payments and current debt must equal a ratio of less than 31 percent for mortgage payments when compared to income. Based on a case-by-case basis, there are exceptions to this rule.
To help you understand all of the ins and outs of this loan, our team of professionals at MortgageDepot will go over everything with you to make sure you understand the FHA loan limits. Our goal is to get you into a mortgage that is going to work the best for your specific wants and needs.