How To Qualify For FHA Loan in Lone Pine California (Inyo County)
Looking for an FHA Loan in Lone Pine California?
FHA loans have been a flexible mortgage program that’s been around since the 1930’s and is insured by the Federal Housing Administration (FHA). Popular with first-time home-buyers, FHA mortgages 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 rating can be between 500 – 579 if a 10% down payment is made. It’s crucial to remember though, that the lower the credit worthiness, 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 mortgage lenders with sufficient insurance; and to help grow the housing market by making mortgages more accessible and attainable for consumers with less than perfect credit or a low down payment due to FHA mortgage limits in Lone Pine, 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, lenders can, and do, offer FHA mortgages at beneficial mortgage loan interest 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 Lone Pine 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 mortgage loan.
Borrowers who cannot afford a 20 percent down payment, have a lower credit score, or can’t get approved for private mortgage insurance should look into whether an FHA loan is the popular option for their personal scenario.
Another advantage of an FHA loan is that it’s an assumable mortgage which means if you want to sell your property, 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 Inyo 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 aggressive with respect to gifts for down-payment. Very few mortgage loan programs will permit 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 family member, 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 adjusts annually after the initial fixed period. The 3/1 and 5/1 FHA Hybrid products permit 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 Lone Pine California
The Paiute people inhabited the Owens Valley area from prehistoric times. These early inhabitants are known to have established trading routes which extended to the Pacific Central Coast, delivering materials originating in the Owens Valley to such tribes as the Chumash.
A cabin was built here during the winter of 1861–62. A settlement developed over the following two years. The Lone Pine post office opened in 1870.
On March 26, 1872, at 2:30 am, Lone Pine experienced a violent earthquake that destroyed most of the town. At the time, the town consisted of 80 buildings made of mud and adobe; only 20 structures were left standing. As a result of the quake, which formed Diaz Lake, a total of 26 people lost their lives. A mass grave located just north of town commemorates the site of the main fault. One of the few remaining structures pre-dating the earthquake is the 21-inch-thick “Old Adobe Wall” located in the alley behind the Lone Star Bistro, a coffee house.
During the 1870s, Lone Pine was an important supply town for several nearby mining communities, including Kearsarge, Cerro Gordo, Keeler, Swansea, and Darwin. The Cerro Gordo mine high in the Inyo Mountains was one of the most productive silver mines in California. The silver was carried in ore buckets on a strong cable to Keeler, and then transported four miles northwest to smelter ovens at Swansea. To supply the necessary building materials and fuel for these operations, a sawmill was constructed near Horseshoe Meadows by Colonel Sherman Stevens that produced wood for the smelters and the mines. The wood was moved by flume to the valley, where it was burned in adobe kilns to make charcoal, which was then transported by steamships across Owens Lake to the smelters at Swansea, about 12 miles south of Lone Pine.
Railroads played a major role in the development of Lone Pine and the Owens Valley. In 1883, the Carson and Colorado Railway line was constructed from Belleville, Nevada, across the White Mountains to Benton, and then down into the Owens Valley where it ended in Keeler. The arrival of the C&C rail line, with its engine “The Slim Princess”, and the stagecoach in Keeler were a major economic boost for the area. Twice a week, passengers arrived on the evening train, spent the night at the Lake View Hotel (later renamed the Hotel Keeler), and then took the stage the following morning to Mojave. A short line to the north connected with the Virginia and Truckee Railroad line at Mound House, Nevada.
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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 house. 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 Inyo 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 Home Loans
In addition to its popular FHA loan, the FHA likewise insures other loan programs offered by personal lenders. Here’s a look at each of them.
- FHA 203( k) loans – These FHA loans help homebuyers purchase a house– and remodel it– all with a single mortgage. Property owners can likewise use the program to re-finance their existing home mortgage and include the expense of redesigning jobs into the brand-new loan. FHA 203( k) loans can be found in two types:
- The limited 203( k) has a much easier application process, and the repairs or enhancements must total $35,000 or less.
- The basic 203( k) needs additional documentation and applies to improvements costing more than $5,000, but the overall value of the property should still fall within the FHA home mortgage limitation for the location.
- Home Equity Conversion Mortgage, or HECM – A HECM is a popular kind of reverse mortgage and is likewise guaranteed by the FHA. A HECM enables older house owners (aged 62 and up) with considerable equity or those who own their houses outright to withdraw a part of their house’s equity. The quantity that will be available for withdrawal differs by borrower and depends on the age of the youngest customer or qualified non-borrowing partner, present interest rates and the lower of the house’s assessed worth or the HECM FHA mortgage limitation or list prices.
- FHA Energy Efficient Mortgage (EEM) program – Energy effective home loans backed by the FHA permit property buyers to acquire homes that are already energy efficient, such as EnergyStar-certified buildings. 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 earnings will increase with time. You start out with smaller monthly payments that slowly go up. 5 particular plans are offered: three plans that permit five years of increasing payments at 2.5 percent, 5 percent and 7.5 percent each year. 2 other plans set payment increases over 10 years at 2 percent and 3 percent annually.
(Or call 213-474-7389 to ask a local lender anything!)
FHA Loan Limits for 2022
For 2019, the flooring limit for FHA loans in most of the country 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 “floors” that FHA will insure. FHA updates limit quantities each year in reaction to changing home 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 conventional home mortgages guaranteed or owned by Fannie Mae and Freddie Mac. Ceiling and flooring limits differ according to the expense of living in a specific area, and can be various from one county to the next. Areas with a higher expense of living will have greater limits, and vice versa. Unique exceptions are produced housing in Alaska, Hawaii, Guam and the Virgin Islands, where home building and construction is more pricey.
FHA Loan Relief
Loan servicers can offer some flexibility on FHA loan requirements to those who have actually suffered a serious financial challenge or are struggling to make their payments.
That relief might be in the form of a momentary period of forbearance, a loan modification that would lower the interest rate, extend the repayment period, or delay 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 Lone Pine CA?
The FHA makes it relatively simple to qualify for a mortgage. Again, the government guarantees the loan, so lending companies are more willing to approve home loans. However, mortgage lenders can (and do) set standards that may be stricter than FHA requirements. If you’re having trouble with one FHA approved lender near Lone Pine CA, you might have better luck with shopping around for a better option.
Note: you never know until you apply. Even if you think you won’t qualify after reading this page, talk with an FHA approved lender in Lone Pine to find out for sure.
Income limits: there are none. You’ll need enough to show that you can repay the 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 home loan.
How to Find FHA Lenders
Debtors get their home mortgage from FHA-approved lenders in Lone Pine rather than the FHA itself, which only insures the loans. FHA-approved lending institutions can have various rates and expenses, even for the exact same loan.
FHA loans are offered through many sources– from the biggest banks and cooperative credit union to community banks and independent home loan lending institutions. Expenses, services and underwriting standards differ amongst lenders or home loan brokers, so it’s essential to search.
Discover more about how to discover low FHA home loan loan provider.