An FHA loan is a mortgage that is insured by the Federal Housing Administration, a division of the Department of Housing and Urban Renewal. The FHA will insure a lender against loss (in the event of borrower default), therefore encouraging lenders to make more loans to home buyers who might not otherwise qualify for home financing.
FHA loans are available with lower down-payment requirements, and in many cases the loan-to-debt ratio, which determines how much you can afford in mortgage payments, is more lenient than a conventional loan would allow. In our Tulsa and Oklahoma market, the FHA maximum loan amount is $200,160. Any loan above that amount would need to be a conventional or VA loan product. Borrowers who use FHA loans are required to pay a mortgage insurance premium at the loan closing (which can be financed into the loan), plus a monthly amount that is included in the loan payment. The monthly mortgage insurance premium for FHA loans is approximately ½ as much as the monthly private mortgage premium for conventional loans. There are many bond programs for first-time buyers that provide assistance towards down-payment and closing costs that can be done in combination with FHA insured mortgages. Many first home purchases in the Tulsa market are funded in this manner.
What Is a “Jumbo Mortgage?”
In Oklahoma, jumbo mortgages are any loans that exceed $417,000, as that is where the conforming conventional loan products end. Our country is considered the
wealthiest in the world because we have a strong middle class. The basic foundation of wealth for the middle class is homeownership. For those who are less well off or ranked near the bottom of the middle class, homeownership is a wealth building tool for accumulating wealth and moving up in the world.
For more information about this topic or other mortgage related questions, please contact mortgage expert Jeff Sargent of Pinnacle Mortgage Corp/a division of ONB bank @ 918.481.6833.
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