How To Qualify For FHA Loan in Cantil California (Kern County)
Looking for an FHA Loan in Cantil California?
An FHA loan is a mortgage that’s insured by the Federal Housing Administration (FHA). Popular with first-time home-buyers, FHA home loans require flexible minimum credit scores and down payments than many commonplace loans.
How Does an FHA Loan Work?
Borrowers can qualify for an FHA loan with a down payment as little as 3.5% for a credit score of 580 or higher. The borrower’s credit score can be between 500 – 579 if a 10% down payment is made. It’s crucial to remember though, that the lower the credit rating, the higher the interest borrowers will pay. Something also worth noting is that the FHA loan limits affect your FHA mortgage insurance – its just part of the FHA loan requirements.
The FHA program was created in response to the increase of foreclosures and defaults that happened in 1930s; to provide lending companies with adequate insurance; and to help stimulate the housing market by making home loans much more accessible and affordable for home-buyers with not so great credit or a low down payment due to FHA mortgage limits in Cantil, California. Essentially, the federal government insures loans for FHA-approved mortgage companies in order to reduce their risk of loss if a borrower defaults on their home loan payments.
Because of that insurance, mortgage companies can, and do, offer FHA home loans at beneficial mortgage rates and with less stringent and more flexible qualification requirements. The FHA is an agency within the U.S. Department of Housing and Urban Development.
(Or call 213-474-7389 to ask a local lender anything!)
Benefits of FHA Loans: Low Down Payments and Less Strict Credit Score Requirements
Typically an FHA loan in Cantil is one of the easiest types of mortgage loans to get approved for because it requires a low down payment and you can have less-than-perfect credit. For FHA loans, down payment of 3.5 percent is required for maximum financing. Borrowers with credit scores as low as 500 can qualify for an FHA home loan.
Consumers who cannot afford a 20 percent down payment, have a lower credit score, or can’t get qualified for private mortgage insurance should look into whether an FHA loan is the popular option for their personal circumstances.
Another advantage of an FHA mortgage is that it’s an assumable mortgage loan which means if you want to sell your house, the buyer can “assume” the loan you have. People who have low or bad credit, have undergone a bankruptcy or have been foreclosed upon may be able to still qualify for an FHA loan.
FHA Allows a 3.5% Down-Payment
For today’s home buyers, there are only a few mortgage options which allow for down-payments of five percent or less for residents of Kern County. The FHA is one of them.
With an FHA mortgage, you can make a down-payment as small as 3.5%. This benefits home buyers who don’t have a lot of money saved up for down-payment; and, home buyers who would rather save money for moving costs, emergency funds, or other needs.
FHA Allows 100% Gift Funds
The FHA is vigorous with respect to gifts for down-payment. Very few mortgage loan programs will make it possible for your entire down-payment for a home to come from a gift. The FHA will.
Via the FHA, your entire 3.5% down-payment can be a gift from parents or another relative, an employer, an approved charitable group, or a government home-buyer program. If you’re using a down-payment gift, though, you’ll need to follow the process.
The FHA Hybrid provides for an initial fixed interest rate for a period of three or five years, and then readjusts annually after the initial fixed period. The 3/1 and 5/1 FHA Hybrid products enable up to a 1% annual interest rate adjustment after the initial fixed interest rate period, and a 5% interest rate cap over the life of the loan. The new payment after an adjustment will be calculated on the current principal balance at the time of the adjustment. This insures that the payment adjustment will be very little even on a worst case rate change.
About Cantil California
Cantil was founded as a station on the Nevada and California Railroad in 1908 or 1909 when the line was extended from Owens Lake to Mojave. The name is Spanish for “stone cliff” or “steep rock”, and is one of a series of “C” names chosen for this section of the line including Cambio, Cinco, and Ceneda. The first post office opened in 1916.
Parts of scenes of Universal’s 1932 horror film The Mummy were filmed here.
Cantil is near the home of the Honda Proving Center of California (HPCC), a test track used for testing new car models and motorcycles. Honda closed the test facility in April 2010 and put it up for sale; on December 8, 2015, the company announced that they would renovate and expand the HPCC, with some new vehicle test road enhancements and reopen the facility in April 2016.
On October 31, 2014, the Virgin Galactic SpaceShipTwo VSS Enterprise crashed in the Mojave Desert near Cantil, killing one of the two pilots.
It is located on California State Route 14, between Mojave and Red Rock Canyon. It is at an elevation of 2,018 feet (615 m), 6 miles (9.7 km) southwest of Saltdale.
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Who Are FHA Loans For?
FHA loans are offered to low-income individuals who have credit scores as low as 500. Individuals with a credit score between 500-579 can obtain an FHA loan with a down payment of 10%; individuals with a credit score higher than 580 can get an FHA loan with as little as 3.5% down. The Federal Housing Administration does not lend the borrower the money to take on a mortgage or to buy the property. Rather, the borrower pays a monthly or annual mortgage insurance premium to the FHA to insure the loan which the lending institution issues to him or her. In case of default, the lender’s financial risk is minimized since the FHA would step in to cover the payments.
Having no credit history is not a problem with an FHA loan for Kern County. Instead of your credit report, the lender may look at other payment-history records, such as utility and rent payments.
Even people who have gone through bankruptcy and foreclosure may still qualify for an FHA loan. However, the lower the credit score and the lower the down payment, the higher the interest rate.
(Or call 213-474-7389 to ask a local lender anything!)
Kinds Of FHA Loans
In addition to its popular FHA loan, the FHA also insures other loan programs provided by personal lenders. Here’s a look at each of them.
- FHA 203( k) loans – These FHA loans help homebuyers acquire a house– and refurbish it– all with a single home loan. Homeowners can also utilize the program to refinance their existing home mortgage and include the cost of remodeling projects into the brand-new loan. FHA 203( k) loans been available in two types:
- The minimal 203( k) has an easier application process, and the repairs or improvements should amount to $35,000 or less.
- The basic 203( k) requires additional documentation and applies to enhancements costing more than $5,000, but the total value of the home should still fall within the FHA mortgage limit for the area.
- House Equity Conversion Mortgage, or HECM – A HECM is a popular type of reverse home mortgage and is also guaranteed by the FHA. A HECM allows older house owners (aged 62 and up) with significant equity or those who own their homes outright to withdraw a portion of their home’s equity. The quantity that will be offered for withdrawal differs by customer and depends on the age of the youngest customer or qualified non-borrowing partner, existing interest rates and the lower of the home’s assessed value or the HECM FHA home loan limitation or sales price.
- FHA Energy Efficient Mortgage (EEM) program – Energy efficient mortgages backed by the FHA permit homebuyers to purchase houses that are already energy efficient, such as EnergyStar-certified structures. Or they can be used to purchase and renovate older homes with energy-efficient, or “green,” updates and roll the costs of the upgrades into the loan without a bigger deposit.
- FHA Section 245( a) loan – Also called the Graduated Payment Mortgage, this program is geared at customers whose incomes will increase over time. You start out with smaller regular monthly payments that slowly increase. Five specific plans are available: three strategies that enable 5 years of increasing payments at 2.5 percent, 5 percent and 7.5 percent yearly. 2 other strategies set payment increases over 10 years at 2 percent and 3 percent yearly.
(Or call 213-474-7389 to ask a local lender anything!)
FHA Loan Limits for 2023
For 2019, the floor limit for FHA loans in most of the nation is $314,827, up from $294,515 in 2018. For high-cost areas, the ceiling is $726,525, up from $679,650 a year back. These limits are described as “ceilings” and “floorings” that FHA will insure. FHA updates limit amounts each year in action to altering house prices.
FHA is needed by law to adjust its quantities based upon the loan limits set by the Federal Housing Finance Agency, or FHFA, for standard home mortgages guaranteed or owned by Fannie Mae and Freddie Mac. Ceiling and flooring limits vary according to the expense of living in a particular location, and can be various from one county to the next. Areas with a higher expense of living will have higher limits, and vice versa. Special exceptions are made for real estate in Alaska, Hawaii, Guam and the Virgin Islands, where house building is more costly.
FHA Loan Relief
Loan servicers can offer some versatility on FHA loan requirements to those who have suffered a major monetary difficulty or are struggling to make their payments.
That relief might be in the form of a temporary duration of forbearance, a loan adjustment that would decrease the rate of interest, extend the payback duration, or postpone part of the loan balance at no interest.
The FHA Hybrid Adjustable Rate
FHA administers a number of programs, based on Section 203(b), that have special features. One of these programs, Section 251, insures adjustable rate mortgages (ARMs) which, particularly during periods when interest rates are low, enable borrowers to obtain mortgage financing that is more affordable by virtue of its lower initial interest rate. This interest rate is adjusted annually, based on market indices approved by FHA, and thus may increase or decrease over the term of the loan. In 2006 FHA received approval to allow hybrid ARMs, in which the interest is fixed for the first 3 or 5 years, and is then adjusted annually according to market conditions and indices.
How do you Qualify for an FHA Loan in Cantil CA?
The FHA makes it relatively easy to qualify for a mortgage. Again, the government guarantees the loan, so lenders are more willing to approve mortgage loans. However, mortgage lenders can (and do) set standards that can be stricter than FHA requirements. If you’re having trouble with one FHA approved lender near Cantil CA, you might have better luck with choosing another.
Note: you never know until you put in an application. Even if you think you won’t qualify after reading this page, talk with an FHA approved lender in Cantil to find out for sure.
Income limits: there are none. You’ll need enough to show that you can repay the mortgage loan but these loans are geared towards lower income applicants. If you’re lucky enough to have a high income, you aren’t disqualified like you might be with certain first-time home buyer programs.
FHA Closing Costs
While FHA defines which closing costs are allowable as charges to the borrower, the specific costs and amounts that are deemed reasonable and customary are determined by each local FHA office.
FHA Debt Ratios
In order to prevent home-buyers from getting into a home they cannot afford, FHA qualifications have been set in place requiring borrowers and/or their spouse to qualify according to set debt to income ratios.
FHA Credit Issues
An FHA loan applicant’s past credit performance that attests good credit history and a solid track record of timely payments will likely be eligible for the mortgage.
How to Find FHA Lenders
Debtors get their home mortgage from FHA-approved loan providers in Cantil instead of the FHA itself, which just guarantees the loans. FHA-approved lending institutions can have various rates and costs, even for the exact same loan.
FHA loans are readily available through many sources– from the biggest banks and cooperative credit union to neighborhood banks and independent home loan loan providers. Expenses, services and underwriting standards vary among lending institutions or home mortgage brokers, so it’s essential to look around.
Find out more about how to discover low FHA mortgage lending institution.