California is a beautiful state offering everything from rugged mountains to amazing cities with endless things to see and do. In the major cities in the state, including Los Angeles, buying a home is a dream for many individuals and couples.
However, because Los Angeles is such a sought after city to settle down in, home prices can be very high. This includes the new home construction throughout the area as well as older homes that may be on the market.
An FHA mortgage loan is a great option for many people in the area that want to become homeowners. To understand the benefits and qualifications for this loan option, here are the basics that anyone applying for an FHA mortgage needs to know.
With the variations in the home markets in California, FHA mortgage limits are set by the county. These limits are the maximum amount that the FHA will insure for lenders on any given property type.
The limits will change based on the market. The best place to find the current limits, which will vary by type of property including single family through duplex, tri-plex and four-plex is on the FHA website. Los Angeles and San Francisco (Marin County) tend to have the highest maximums for all eligible property types throughout the state.
Your credit score will also be a consideration, as with any loan. Applicants with credit scores of 580 or above will only be required to provide a 3.5% down payment on the home when they are approved for the loan.
It is possible to obtain an FHA loan with a credit score between 500 and 580. However, there will be a requirement of a 10% down payment, which can be a challenge on these higher priced properties.
In Los Angeles, let Guaranteed Rate assist you in determining if you are eligible for an FHA mortgage. To talk to one of our experts or to start an online application, visit our website at www.guaranteedrate.com/offices/CALosAngeles