What is a Utah FHA Loan?
A Utah FHA loan is a type of government-insured mortgage from the state of Utah. The Federal Housing Administration (FHA) insures the loan, agreeing to help recoup some of the loses the lender if the borrower defaults. This insurance makes FHA loans more secure for lenders which lead to benefits for the borrower. One of these benefits as a lower down payment, which has the option of being paid as a gift by a friend or family member. The small down payment makes FHA loans ideal for first-time homeowners because they do not have the sale of a previous home to help make the down payment. Below, we at Online Loans have broken down the assorted information available across the web into a convenient need-to-know to make getting you FHA loan as simple as possible.
To get an FHA loan, you need have held your current job for at least the last two years. You need to have a mortgage payment expense to income ratio of 31% or less, which means that the payments of your FHA loan cannot be more the 31% of your income. You also need to have a total fixed payment to income ratio of no more than 43%, which mean that the total of all of your debt obligations cannot equal more than 43% of your income. To qualify for an FHA loan with a 3.5% down payment you need to have a FICO credit score of 580 or better. If your credit score is between 500 and 580, you may qualify for an FHA loan with a 10% down payment. Generally, FHA loans are not given to borrowers with credit scores of less than 500, although exceptions are sometimes made. Individual lenders can set their own credit requirements which are often higher than the FHA minimums but still usually lower than conventional loans.
To help get a sense of what your first home will end up costing, you may want to check out our mortgage calculator.
Since FHA loans are given out by independent lenders and not any central organization, there is a variety that comes from these different lenders, depending largely on your credit score (see our credit rebuilding guide for advice on keeping your credit score high).
However, in general, interest rates for FHA loans are lower than conventional loans because the FHA’s insurance makes them more secure. In addition to the interest rates, you will have to for additional insurance which costs between .45% and .85% per year, although this is usually more than offset by the lower interest rates.
Larger loans tend to have smaller APRs because the underwriting costs are roughly the same whether the loan is small or large, and therefore represents a smaller percentage of a larger loan. Longer term FHA loans tend to have APRs than shorter-term FHA loans. In Utah, you can expect the APR for your FHA loan to be between 4.3% and 4.6%.
Maximum ($) Limits - By County
The maximum limits for FHA loans are determined for every county and type of housing. In Utah, the largest maximum is $1,307,175 for a four family home in Summit Park. The smallest maximum is $294,515 for a one family home in one of the less expensive counties. See the other limits here: Download Formats: Excel (.xslx) & CSV