Homeownership is for everyone
an FHA loan can help with that.
“Is an FHA loan right for me?”, “Are FHA loans hard to get?”, “How are FHA loans different?”—we get a lot of questions like this when people are exploring their home loan financing options. And we’re here to answer as many of those questions as we can. At Refined Lending, a division of Luminate Bank,, we make it our priority to guide you through the best financial decisions, all with your interest in mind. It’s our goal to help you feel informed and engaged throughout the entire lending process. Let us help you today!
What is a FHA home loan?
An FHA loan is a mortgage that is issued by federally qualified lenders and insured by the Federal Housing Administration (FHA). Typically, FHA loans are designed for low-to-moderate income borrowers who are unable to make a large down payment or have a less than ideal credit score.
What does that mean for homebuyers?
Because of the low credit score requirements and down payment percentages, this loan option is much easier for most homebuyers to qualify for. Most FHA loans are also quite flexible, and as a buyer, you’ll find that you can use other funds as a means of a down payment (financial gifts, 401k, etc.).
Also, if you have an older home that you’re trying to purchase, know that FHA requirements (see below) are a lot more strict than with conventional loans.
What are the benefits of a FHA Loan vs Any Other Loan?
If you have a lower credit score, less money in your savings for a down payment, or have a reasonable debt-to-income ratio, an FHA loan may be perfect for you. When you work with Refined Lending, a division of Luminate Bank,, you can rest assured knowing we have your best interest in mind. Here are some of the benefits of our FHA loans!
- Easier to Qualify – With limited qualifications to qualify, most people will get approved for an FHA loan without a problem.
- Minimal Down Payment- You only need a 3.5% minimum down payment on an FHA loan.
- Low Credit Score – You can qualify for an FHA loan with a Fico credit score as low as 500.
- Debt Flexibility – With FHA loans, you can have a much higher debt-to-income percentage to qualify.
- Fixed Insurance – Regardless of your credit score, you’ll benefit from a fixed insurance rate.
- Down Payment Assistance – Most FHA loans will allow for down payment assistance programs to help with initial costs.
Do you qualify for a FHA loan?
If you don’t know the answer to this question, that’s completely okay! One of our team members will be happy to go over the details with you, but typically you’ll need a fico credit score of 580 or higher and a down payment of at least 3.5%. The best part about FHA loans is their flexibility. We really mean it when we say we want everyone to be able to qualify for a home loan through us!
FHA Property Guidelines
- No cracked windows
- No missing flooring/no sub-floor showing
- No missing shingles
- AC/Heat must be in working condition
- Plumbing works in all sinks, toilets, showers
- Smoke and carbon monoxide detectors
- GFCI outlets in bathroom and kitchen
- Outlet covers on all outlets
- Up to date well/septic
- Handrails on all stairs
- No peeling paint (before 1978)
- No evidence of termites
- No ripped/badly damaged screens
- No exposed wire
- No falling/unattached gutters
- No rotted window sills/trim
- No missing appliances that are usually sold with the home (fridge, stove, etc.)
- Bedrooms must have large enough windows for egress
- Exterior doors must open/close properly
Still unsure if a FHA loan is right for you?
That’s okay—because our team is here to help guide you every step of the way. We don’t want you to feel left out in the dark, but instead to have complete clarity and transparency throughout your entire loan process.
Here at Refined Lending, a division of Luminate Bank,, we truly believe in our mission and core values. We focus on people like you because we understand that character does count. We stay humble and work hard so that the lending process stays approachable and transparent every step of the way.
Check out what your monthly payment could be by using our FHA MortgageCalculator…
Our mortgage calculators are for demonstration purposes only and may not reflect actual numbers for your specific mortgage. Contact us and we will walk you through the best possible mortgage scenario for your specific needs!
Principal & Interest (P&I)
$MIP
$Taxes & HOA
$Homeowners Insurance
$Purchase PriceHome Value$
Down Payment$
Current Mortgage Balance$
Cash Out$
Upfront MIP$
Total Loan AmountNew Loan Amount$
Home Equity After Cash Out$
Estimated Taxes & InsuranceProperty taxes are generally estimated to be 1.2% of the home's value, but may vary based on your location. Annual homeowners insurance is roughly 0.35% of the home's value but can change based on insurer. Your loan specialist can help you determine property tax and insurance rates in your area.
Annual MIPThe Annual MIP ranges from 0.15% to 0.75% depending on loan term, loan amount and down payment. However, for most FHA borrowers, the Annual MIP is 0.75% of the loan amount. The Annual MIP can last for the life of the loan, or be removed after 11 years if the original down payment is 10% or more.
Upfront MIPThe Upfront MIP, sometimes referred to as the FHA funding fee, is 1.75% of the loan amount. This fee is due at closing and is typically financed into the entire loan amount to reduce out of pocket costs.
Amount FinancedPurchase Price (-) Down Payment (+) Upfront MIP
Estimated Payment$ /mo
Loan amount
$
Down payment
$
Cash Out
$
Home Equity After Cashout
$
Interest rate
Loan term
Taxes & insurance included?
Property tax
Homeowner's insurance
$
Upfront MIP
$
Annual MIP rate
$
Monthly MIP
$
HOA dues
$
Payment Breakdown
Amortization
Principal vs. Interest
Amortization Schedule Breakdown
Our detailed amortization schedule breaks down your mortgage payments, showing how they are split between interest and principal over the life of your loan.Note: The actual monthly payment may be higher than what is shown here, as this schedule does not account for variable costs such as property taxes and home insurance, which are often included in your total mortgage payment.
- Principal payments: $$240,000 (the amount borrowed)
- Interest payments: $$297,554 (the cost of borrowing)
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