Using an FHA Loan to Buy a Home in Las Vegas

Using an FHA Loan to Buy a Home in Las Vegas

Las Vegas isn’t just casinos and entertainment – it’s a wonderful city enjoyed not just by tourists but its many residents. If you have an eye on making your next move, you should know that you can use an FHA loan to purchase a property in the Las Vegas area.

What is an FHA loan?

FHA refers to the ‘Federal Housing Administration’. What this means is that your loan will be handed out by third party mortgage lenders, but insured by the federal government. The security provided by this means that FHA loans can be applied for by people with lower credit scores than conventional loans, and often require a smaller down payment.

As with most loans where a borrower is putting down less than 20%, you’ll have to pay mortgage insurance, including an upfront payment and a smaller annual premium, paid monthly.

FHA loans were originally created during the great depression, when down payments soared as high as 50%, making it unachievable to own a home for most Americans. The program has been in place ever since, and has helped many Americans achieve their dream of owning a home.

How much down payment is there on an FHA loan?

The size of the down payment depends on your credit score. The minimum amount is 3.5% of the purchase price, however this will rise to 10% if your credit score is below 580. These requirements are the same nationwide, and you must have a FICO score of above 500 to qualify for any FHA loan. Remember that you will also have to pay your Mortgage Insurance Premium as well.

How much are the Mortgage Insurance Premiums?

The upfront premium is 1.75% of the loan amount, while the lower annual premium is 0.45% to 1.05%, paid monthly. This is a fixed rate loan, meaning that the interest rate doesn’t change. It’ll help you to plan ahead when making your payments.

What other information will I need to provide?

In the state of Nevada, you’ll also be required to provide a 2 year employment history - as well as fully documenting your income during that time. You must have a maximum debt to income ratio of 43% (some exceptions up to 56%) and no bankruptcies or foreclosures in the past two years (there may be exceptions to this as well, based on extenuating circumstances).

What is the FHA loan limit in Las Vegas?

In Clark County, the county for Las Vegas, you can borrow up to $420,680 with a FHA loan for a single family unit. This is the same for many counties in Nevada, but check how much you can borrow in your county before going forward.

The FHA also offers several additional loans outside a conventional mortgage, so be sure to research these programs to find out whether they are right for you.

If you’re looking for a home in Las Vegas, with many properties that fall below FHA loan limits, browse Las Vegas homes for sale on our website.

Are you a mortgage lender? Learn how you can get exclusive mortgage leads here.

*Disclaimer: This material is provided for information purposes only and is not to be construed as investment or tax advice. Readers are strongly advised to consult with their professional advisors regarding the information herein.

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