How To Qualify For FHA Loan in Wofford Heights California (Kern County)
Looking for an FHA Loan in Wofford Heights California?
FHA loans have been a flexible home loan program that’s been around since the 1930’s and is insured by the Federal Housing Administration (FHA). They are popular especially among first time home buyers because they allow down payments of 3.5% for credit scores of 580+.
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 significant 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 qualifications.
The FHA program was created in response to the rise of foreclosures and defaults that happened in 1930s; to provide mortgage lenders with sufficient insurance; and to help grow the housing market by making home loans much more accessible and affordable for consumers with not so great credit or a low down payment due to FHA mortgage limits in Wofford Heights, California. Essentially, the federal government insures loans for FHA-approved mortgage lenders 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 really attractive 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.
Benefits of FHA Loans: Low Down Payments and Less Strict Credit Score Requirements
Typically an FHA loan in Wofford Heights is one of the easiest types of mortgage loans to qualify 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 loan.
Borrowers 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 best option for their personal circumstances.
Another advantage of an FHA home loan is that it’s an assumable home loan 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.
(Or call 562-502-1502 to ask a local lender anything!)
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 home 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 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 procedure.
The FHA Hybrid provides for an initial fixed interest rate for a period of three or five years, and then changes 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 modification. This insures that the payment adjustment will be very little even on a worst case rate change.
About Wofford Heights California
I.L. Wofford founded the community as a resort in 1948. The Wofford Heights reveal office opened in 1953. It was a location for the 1970 biker film Angels Die Hard.
In 2016 the Erskine and Cedar fires burned on summit of 77,000 acres and exceeding 300 structures. As of 2019 the Lake Isabella area was considered a “very high ember hazard height zone” due to desert winds and the user-friendly Sequoia National Forest. In addition, the median age of residents is 62, and many live upon narrow roads which would be poor escape routes.
Wofford Heights is located at 35°42′25″N 118°27′22″W / 35.70694°N 118.45611°W / 35.70694; -118.45611.California State Route 155 is the single-handedly highway in Wofford Heights, leading south to Lake Isabella and west through Alta Sierra and the Greenhorn Mountains.
According to the United States Census Bureau, the CDP has a total Place of 6.1 square miles (16 km2), all of it land.
According to the Köppen Climate Classification system, Wofford Heights has a semi-arid climate, abbreviated “BSk” on climate maps. Here, the summers can be brutal and have reached as high as 113 °F (45 °C) while the winters are a bit more mild and have gone as low as −3 °F (−19 °C).
Wofford Heights’ eastern stomach borders Lake Isabella. There are two major permission points to the lake from Wofford Blvd: The first is the get into to North Fork Marina and Tillie Creek Campground, and the second is Freear which is at the very fade away of East Evans Road near Wofford Heights Park.
Other Cities You May Be Interested In
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 562-502-1502 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 provided by private lending institutions. Here’s a take a look at each of them.
- FHA 203( k) loans – These FHA loans assist property buyers buy a home– and remodel it– all with a single home mortgage. Homeowners can also utilize the program to re-finance their existing home loan and add the expense of renovating tasks into the brand-new loan. FHA 203( k) loans been available in two types:
- The minimal 203( k) has a much easier application procedure, and the repair work or enhancements need to amount to $35,000 or less.
- The basic 203( k) requires additional paperwork and applies to improvements costing more than $5,000, but the overall worth of the residential or commercial property need to still fall within the FHA mortgage limit for the location.
- House Equity Conversion Mortgage, or HECM – A HECM is the most popular type of reverse home loan and is also insured by the FHA. A HECM allows older property owners (aged 62 and up) with considerable equity or those who own their houses outright to withdraw a part of their home’s equity. The amount that will be offered for withdrawal differs by borrower and depends upon the age of the youngest customer or qualified non-borrowing spouse, existing rates of interest and the lesser of the home’s evaluated worth or the HECM FHA home loan limit or prices.
- FHA Energy Efficient Mortgage (EEM) program – Energy efficient home mortgages backed by the FHA permit property buyers to purchase homes that are already energy effective, such as EnergyStar-certified buildings. Or they can be utilized to purchase and renovate older houses with energy-efficient, or “green,” updates and roll the expenses of the upgrades into the loan without a larger down payment.
- FHA Section 245( a) loan – Also referred to as the Graduated Payment Mortgage, this program is tailored at borrowers whose earnings will increase with time. You start out with smaller sized regular monthly payments that slowly go up. Five particular strategies are readily available: three plans that allow 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.
FHA Loan Limits for 2022
For 2019, the floor limit for FHA loans in the majority of the country is $314,827, up from $294,515 in 2018. For high-cost locations, the ceiling is $726,525, up from $679,650 a year ago. These limitations are referred to as “ceilings” and “floorings” that FHA will guarantee. FHA updates limit quantities each year in response to changing home costs.
FHA is required by law to change its quantities based on the loan limitations set by the Federal Housing Finance Agency, or FHFA, for traditional home mortgages ensured or owned by Fannie Mae and Freddie Mac. Ceiling and flooring limitations vary according to the expense of living in a specific area, and can be different from one county to the next. Areas with a higher cost 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 is more expensive.
FHA Loan Relief
Loan servicers can provide some flexibility on FHA loan requirements to those who have actually suffered a major financial challenge or are struggling to make their payments.
That relief might be in the form of a temporary duration of forbearance, a loan modification that would decrease the interest rate, extend the payback 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 Wofford Heights CA?
The FHA makes it relatively easy to qualify for a mortgage loan. Again, the government guarantees the loan, so lending companies are more willing to approve loans. However, lending companies can (and do) set standards that are stricter than FHA requirements. If you’re having trouble with one FHA approved lender near Wofford Heights 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 Wofford Heights to find out for sure.
Income limits: there are none. You’ll need enough to show that you can repay the mortgage but these loans are geared towards lower income applicants. If you’re fortunate 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 requirements 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 shows good credit history and a solid track record of timely payments will likely be eligible for the home loan.
How to Find FHA Lenders
Borrowers get their home loans from FHA-approved lending institutions in Wofford Heights rather than the FHA itself, which only guarantees the loans. FHA-approved lenders can have different rates and costs, even for the same loan.
FHA loans are readily available through many sources– from the greatest banks and cooperative credit union to neighborhood banks and independent mortgage lenders. Costs, services and underwriting requirements vary amongst lending institutions or home mortgage brokers, so it’s essential to search.
Find out more about how to discover the very best FHA home loan loan provider.