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FHA Loans

FHA loans are a government sponsored loan that requires as little as 3.5% down payment. There are no income limits for this program. This loan type is best suited for those borrowers who may have previous credit challenges and is a good solution that can provide you with a house of your own. The maximum FHA loan for South Dakota is currently set at $314,827.

FHA Mortgage Insurance

FHA mortgage insurance consists of two components:  There is what is called upfront mortgage insurance equivalent to 1.75% of the loan amount.  Remember, the loan amount for an FHA loan is typically 96.5% of the purchase price.  The upfront mortgage insurance is added to the loan amount.  The second component for FHA mortgage insurance is the monthly mortgage insurance.  The monthly mortgage insurance is calculated by taking the loan amount times .0085.   The resulting number is then divided by 12 to determine your current monthly mortgage insurance.   It is important to note that the monthly mortgage insurance for FHA loans remains for the life of the loan.

FHA Assumability

A potential benefit of FHA loans is that they are assumable.  This means that if mortgage interest rates continue to increase, your interest rate could be a selling feature for your home.  As long as somebody qualifies, they could assume your loan.  It is important to always check with a mortgage professional prior to assuming any mortgage loan so that they can help you with the process.

FHA Streamline Refinance

Another feature of FHA loans is the ability to refinance the loan to another FHA loan which is called a streamline refinance.  A new appraisal may not be needed for refinancing and typically the underwriting of the file is easier than when first qualifying for an FHA loan.  Please check with us to determine if FHA streamline refinancing will be of benefit to you.

FHA Loans