FHA Forward Mortgage Loan Options
But there are several options available for an FHA forward mortgage you should know about to make the most informed choice about your new home loan.
Adjustable Rate Mortgages Versus Fixed Rate Mortgages
Why do some borrowers choose an adjustable rate mortgage instead of the more predictable fixed-rate loan? One reason is because these borrowers may not be planning to keep the home for the full term of the mortgage.
An adjustable rate FHA loan means a potentially lower interest rate in the “teaser rate” period than other types of mortgages, with the understanding that when that introductory period is over the rates will be adjusted periodically.
Borrowers who apply for adjustable rate loans often plan to get those loans refinanced at or near the time a teaser rate period ends or within the first adjustment or so. They may also plan to sell the property instead.
How you approach this option is up to you, but accepted wisdom in this area is that a fixed rate mortgage may be better if you aren’t sure what you plan to do with the home long-term yet.
FHA Home Loan Options: Buy Or Build?
You do not have to restrict your home choices to existing construction; with an FHA One-Time Close construction loan or FHA Construction-to-Permanent mortgage, you can choose to have a house built to your specifications from the empty lot to finished structure.
One-Time Close mortgages may have, depending on the lender, different FICO score requirements and other rules that new purchase loans for existing construction do not have; you will need to talk to the participating lender to see what applies at that financial institution.
Single Family Home Loans for Multi-Unit Properties
A single family home loan guaranteed by the FHA may have as many as four living units. If you plan to start a family, want to consider renting out unused units in your home as a landlord, or just feel like a larger property, there are options for you with FHA home loans.
Most FHA mortgages have an occupancy requirement and multi-unit property purchases are no exception. You will be expected to occupy the property as your full-time residence within 60 days of closing (or as per other arrangements made with your lender).
FHA, VA, and USDA: One-Time Close Loans
Annual Income Requirements for FHA Loans
Good Credit History Helps Get FHA Loans
Stay Informed About Your Mortgage Closing Costs
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