FHA Mortgage Loans St. Louis

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Getting You The Competitive Rates on FHA Loans You Deserve

At Liberty Lending Consultants, we are proud to provide our customers throughout the area with exceptional rates on the FHA home loan they need. Our experienced mortgage brokers are especially fond of FHA loans for the simple fact that they can help families who may not meet the requirements for conventional mortgage loans.

FHA loans in Missouri are becoming even more popular since their inception in 1934, especially among first-time homebuyers because the requirements are less strict than conventional loans. Today, millions of families can now obtain the money they truly need and deserve.

Regardless of whether you have less-than-perfect credit, you’ve previously filed for bankruptcy, you’ve experienced a foreclosure or you’re simply looking for a lower down payment, the odds of qualifying for an FHA loan are still in your favor. FHA loans in Missouri are the most viable loan option for first-time home buyers, people who are moving up or families who need a boost-we can help you today!


What Are the Advantages of FHA Loans from Liberty Lending Consultants?

  • 3.5% Down
  • Great 30-Year or 15-Year Fixed Rates
  • Cosigners Are Allowed
  • Gift Down Payment Funds Allowed
  • Those with Less-than-Perfect Credit Can Qualify
  • Great for Debt Consolidation
  • Particularly Beneficial to Buyers with Less Cash in the Bank
  • Max Loan Amount is Approx. $420,680 (Depending on Area)
  • Owner Occupied Only
  • Oftentimes Even the Closing Cost Can be Rolled into the Loan
Who Qualifies For An FHA Loan

Who Qualifies For An FHA Loan:

FHA loans are gaining popularity because they are less strict than conventional loans, however, not everyone can qualify for this type of loan product.

Credit Score:

FHA loans are attractive to a lot of borrowers who may not have a perfect credit history. The minimum credit score for FHA loans depends on the specific type of loan the borrower needs but generally goes as low as 500. Individuals with a lower credit score between 500 and 579 must make mortgage down payments of at least 10 percent, however, a down payment as low as 3.5 percent requires a borrower with a credit score of just 580 or higher.

Although FHA loans are a great fit for many borrowers, individuals with credit scores under 500 are generally ineligible and should consult a Liberty FHA loan specialist to see if they qualify for “specialty circumstances.”

FHA loans are great for first-time buyers because they only require an investment of 3.5 percent of the purchase price as a down payment. Additionally, these loans do not usually require a minimum income amount as long as the buyer can show they have enough to carry current monthly debts and obligations.

FHA loans allow for some flexibility with borrowers that have declared bankruptcy or been foreclosed on. While typical borrowers are required to be 2-3 years out of bankruptcy and foreclosure, exceptions can be made in lieu of extenuating circumstances especially if the person has re-established good credit.

FHA Loan vs. Conventional Loan

FHA Loans and Conventional Loans are two of the most popular loan options for homebuyers. While they are not technically issued by the Federal Housing Administration, FHA Loans are federally insured home loans issued by an FHA lender for individuals with less than ideal credit and lower income. Conventional Home Loans are loans issued by a mortgage lender and require a higher credit score and income. Conventional Home Loans typically feature more preferred monthly payments, interest rates, and flexibility. Compare FHA Insured Loans with Conventional Home Loans below.

Conventional Mortgage Loans

Conventional Mortgage Loans are a popular way to purchase a home. Conventional Housing Loans are harder to get than FHA Insured Loans, especially for lower-income applicants and applicants with a limited credit history. Conventional Housing Loans also feature some of the lowest fixed payments and interest rates making Conventional Loans extremely valuable.

  • Primary, secondary, or investment property
  • Down payment varies, typically 3-5%
  • Insurance can be waived over time
  • Monthly premiums
  • FICO Score 640+

You might be considering FHA financing if you’re in the market for a new home. There are a few things you need to know before applying. First, you should make sure you have a steady income. The longer you’ve been employed, the better. Lenders will also check your debt-to-income ratio, which is how much of your income you dedicate to paying off debt each month. This includes car notes, student loans, and credit cards. As always, Liberty Lending is here to help every step of the way. But what exactly do you need to know about FHA loans?

FHA Insured Loans

FHA Insured Loans are insured loans offered by private mortgage lenders but insured by the Federal Housing Administration. FHA Loans are popular among first-time home buyers and lower-income buyers. FHA Loan approval will vary with income and creditworthiness, however, FHA Loans are typically easier to get than Conventional Housing Loans.

  • Primary property only
  • Lower down payment, as low as 3.5%
  • Insurance required
  • Monthly premiums
  • FICO Score Not Required


What Interest Rates Do FHA Loans Have?

When you’re looking for the lowest mortgage rates possible, consider FHA loans. These mortgages have been around since 1934 and have helped more than 40 million Americans buy their homes. They require less than a 20% down payment and offer low-interest rates. In some places, a USDA loan or VA loan is also an option.

Mortgage insurance on FHA loans is required, but the cost is lower than for conventional loans. You’ll have to pay 1.75% upfront and 0.85% per year. This isn’t much, but it can add a lot to the cost of the loan. For this reason, it’s a good idea to put more money down upfront.

Historically, FHA loan rates have been higher than conventional mortgages, although they have been trending lower since the late 2000s. These mortgages are backed by the Department of Housing and Urban Development (HUD), which means lenders won’t experience as much loss if you default on the loan. For this reason, FHA lenders can be more generous when it comes to interest rates.

Interest rates on FHA loans can vary, depending on several factors, including the state of the economy and your own personal financial circumstances. As a result, it’s best to apply with several lenders to find the lowest interest rates. After comparing the loan offers, you’ll have an idea of which mortgage lender offers the lowest interest rates.

Are FHA Loans More Flexible?

The Federal Housing Administration (FHA) recently announced new flexible guidelines for participating lenders. These guidelines allow lenders more flexibility when determining a borrower’s income. These changes should help borrowers with employment or income gaps. The new FHA guidelines also make it easier for lenders to work with borrowers who have had previous employment gaps or are self-employed.

The FHA loan program allows borrowers with less-than-perfect credit, little or no down payment, and a high debt-to-income ratio to purchase a home. With flexible guidelines, this type of loan is especially useful for first-time homebuyers. Although there are no set income limits or credit score minimums, you should be aware that the guidelines vary from one lender to another.

Another helpful feature of FHA guidelines is that they allow for gaps with an explanation. For instance, borrowers who are self-employed can get an exception if they have been in the same line of business for two years. Similarly, borrowers who have been in the military can also get a waiver for the two-year employment requirement.

Moreover, the FHA guidelines allow sellers to contribute up to 6% of the sale price to cover closing costs, and gift funds are allowed. A few other important FHA guidelines are that the mortgage payment cannot exceed 31% of borrowers’ total income. Once that is added to other debts, the total amount should not exceed 43% of income. However, if compensating factors are present, higher ratios may be allowed.

FHA mortgage insurance requirements are easier to meet than those for other loan programs. This allows borrowers with low credit scores or large existing debts to qualify. In addition, FHA home loans have flexible underwriting guidelines, allowing lenders to be more accommodating to borrowers with credit challenges. Borrowers must still make payments on the mortgage insurance premium, which will be either a monthly payment or an upfront mortgage insurance premium financed at closing.

What If I Have Bad Credit?

An FHA loan may be the best loan option for first-time buyers, as there are less stringent requirements. It may require a smaller down payment than a conventional mortgage, but the FHA loan guarantees banks and lenders against default. It may also require a lower interest rate. It is important to note that the minimum credit score required for an FHA loan is 500.

In order to be eligible for an FHA loan, you need to have a minimum credit score of 580. Generally, a higher credit score means more favorable lending terms. But, it is not entirely out of the question to qualify with a lower score. Depending on your situation, you might be able to qualify for a lower interest rate or even a lower down payment.

The FHA offers some flexibility, and it is essential to understand that borrowers with low credit scores can still get approved. However, if you have no credit, you must have a co-borrower with a credit score of 620 or higher. In addition, your lender may require a higher down payment or credit references.

You can raise your credit score to be approved for an FHA loan by paying off debt, making a larger down payment, or even getting a co-borrower. In addition, you can reduce the amount of money you need to borrow by lowering your debt-to-income ratio. In addition, you can reduce the monthly payment by buying a more affordable home.

Besides being eligible for an FHA loan, you should also be aware of the debt-to-income ratio (DTI). This is a measure of how much of your pre-tax income you spend on monthly debt payments. This includes your mortgage, rent, credit cards, and student loans. If your DTI is above a certain level, you may qualify for a lower interest rate.

As a general rule, an FHA loan requires a 3.5% down payment. However, a higher score means you can qualify for a lower down payment and/or a higher amount of allowance for existing debt. An FHA loan is also cheaper than a conventional loan, so it is advisable to shop around to find the best interest rate.

What’s My Down Payment?

The minimum cash down payment required by FHA is 3.5% of the sales price or appraised value of the property. This must include any necessary fees and closing costs. It must be obtained from sources acceptable to the lender and must be verified and documented. In some cases, the borrower can use gift funds to cover the down payment.

The FHA loan rules are clear and detailed, protecting the integrity of the home buying process. Although there is no direct FHA assistance for a down payment, the agency offers information and resources to help borrowers find down payment assistance programs. However, these programs are governed by federal rules and regulations and should be verified.

Saving for a down payment is often a significant roadblock to home ownership, and many people never become homeowners. Even borrowers with a high credit score and low debt-to-income ratio may not have enough money to cover a down payment. Luckily, there are several programs that can help people achieve their dream of becoming a homeowner.

Applicants with a good credit score and a low DTI ratio are eligible for an FHA mortgage. They can qualify for a 3.5% or 10% down payment. Borrowers with marginal credit scores should consider putting down more than three percent. However, even if their credit score is 580 or above, they may be eligible for a lower mortgage rate.

That’s a lot of information about FHA loans! We can’t blame you if you’re more than a little confused, but hopefully, you’re a little more confident in your knowledge of FHA loans. If you have any questions or want to apply for an FHA mortgage loan of your own, call Liberty Lending today!

Federal FHA Loan Requirements

Credit Score

The minimum credit score required for an FHA loan is typically lower compared to conventional loans. While specific guidelines may vary, a credit score of 580 or higher is generally needed to qualify for a 3.5% down payment. Borrowers with credit scores between 500 and 579 may still be eligible, but they will likely need to make a larger down payment (usually 10% of the purchase price).

Down Payment

FHA loans allow for a lower down payment compared to conventional mortgages. The standard down payment requirement is 3.5% of the home’s purchase price. This is particularly beneficial for first-time homebuyers or those with limited savings for a down payment.

Debt-to-Income Ratio (DTI)

The borrower’s DTI ratio is a critical factor in FHA loan approval. Generally, the front-end DTI ratio (housing expenses compared to income) should not exceed 31%, while the back-end DTI ratio (total monthly debt payments compared to income) should not surpass 43%. Exceptions may be made with compensating factors.

Employment and Income

Borrowers need to demonstrate stable employment and income history. Consistent employment for at least two years is typically required, and the borrower’s income should be verifiable.

Property Eligibility

The property being purchased must meet certain requirements, including specific standards for safety, security, and livability. The property will undergo an appraisal to ensure it meets FHA guidelines.

Missouri-Specific Requirements for FHA Loans

We want to provide our clients with accurate and up-to-date information about FHA loan limits specific to the state of Missouri. These loan limits are subject to change each year, so it’s essential for potential homebuyers to check the latest figures or contact us when considering an FHA loan.

As of July 2023, the Missouri-specific FHA loan limits for a property of a given size are as follows:

  • One-Family: $472,030
  • Two-Family: $604,400
  • Three-Family: $730,525
  • Four-Family: $907,900

These limits indicate the maximum loan amounts that can be insured by the Federal Housing Administration for different types of residential properties. It’s crucial to keep in mind that these limits may vary depending on the location of the property. Don’t be afraid to ask about the limits for the county in which you intend to purchase your home!

We are committed to helping our clients navigate the complexities of FHA loans and ensuring they have access to the most suitable mortgage options tailored to their unique needs. Our expertise and experience in the real estate market will guide borrowers through the application process and provide them with a seamless and transparent experience. Contact Liberty Lending today to get started with your own FHA loan!