FHA
An FHA loan from CNB Bank & Trust, N.A. can help you finance your primary residence, even if you're a first-time buyer. Get started on your application today.
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What are FHA loans?
FHA loans are mortgage loans that are backed by the government and insured by the Federal Housing Administration. These types of loans have a low down payment and minimum credit score requirement, which makes them very popular with first-time home buyers and people who have low credit scores or savings for down payments.
FHA loans have a loan term of up to 30 years and can have a fixed or adjustable interest rate. Additionally, borrowers will need to pay closing costs for the loan, as well as mortgage insurance premiums (MIPs).
Why are FHA loans beneficial?
FHA loans are beneficial for a variety of reasons, particularly for borrowers who don't have many savings to put towards a down payment, or those who do not have a high credit score. Some potential benefits of an FHA loan may include:
- Competitive Interest Rates: Interest rates on FHA loans are often comparable to more conventional loan types, but in many cases, rates actually end up being lower due to the base rate being lower, due to government backing providing a lower risk to the lenders offering the loan.
- No Prepayment Penalty: Unlike other types of loans, FHA loans don't come with a penalty for paying off the loan before your term period is up. Therefore, you're able to finish paying off the loan whenever, for multiple valid reasons.
- Low Credit Score and Down Payment Requirements: Borrowers may be able to qualify for an FHA loan with a 3.5% down payment if they have a credit score of 580, or a 10% down payment with a credit score of 500. These easier qualification requirements can help borrowers begin building home equity sooner than other loans might allow for.
Feeling ready? Begin your online application now!
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Frequently Asked Questions for FHA loans
Are FHA loans only for first-time home buyers?
FHA loans are not exclusive to first-time home buyers. While they are generally favored by people in this category, they are still available to people who have purchased homes in the past., though you can only have one FHA loan at a time.
What do I use an FHA loan for?
FHA loans are generally used for purchasing or refinancing a primary residence, in the form of single-family homes, condominiums, two- to four-unit multifamily homes, etc. Additionally, there are certain types of FHA loans that you can apply for when looking to purchase an energy efficient home, a home in need of repairs, and others.
Are there options to help pay my down payment?
Yes! FHA loans let borrowers utilize certain down payment assistance programs to assist depending on their eligibility, as well as other sources such as gifts from family, friends, or others who do not have a financial interest in the transaction.
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