ServicesFHA Loans
FHA Loans in Pflugerville
FHA financing gets you into a house with 3.5% down and more room on credit than many conventional loans give. We guide you to closing, then call back down the road to explain your mortgage insurance and tell you when a refinance could pay off.
How FHA Financing Works and Who It Suits
These loans are backed by the Federal Housing Administration. Since the government takes on some of the risk, a lender can accept a smaller down payment and a lower credit score than most conventional loans allow. The trade-off is mortgage insurance. You pay one premium at closing and a smaller amount every month.
FHA is a good match for many first-time buyers, for people getting their credit back on track, and for buyers whose family is chipping in on the down payment. You have to live in the property. It cannot be a rental or a vacation place. If your credit is solid and you have more cash set aside, we will say so when a conventional loan would cost you less.
We have 11 years in the mortgage industry. The same questions about FHA loans come up after closing year after year, so we get ahead of them before you sign.
What You Get When We Handle Your FHA Loan
- Pre-qualification by phone
- We go over income, debts, credit and savings with you on the phone. You learn roughly what you can qualify for before you start touring houses.
- A clear payment breakdown
- Principal, interest, property taxes, hazard insurance and FHA mortgage insurance, each on its own line. Texas property taxes run high, so we make sure the escrow part of the payment is not a surprise.
- Help with gift funds
- FHA allows family to cover part or all of the down payment. We tell you what the gift letter needs to say and how the money should move so underwriting accepts it.
- Appraisal guidance
- An FHA appraiser looks at condition as well as value. Peeling paint on an older house, a missing handrail or a broken window can get flagged. We tell you what to expect so you and the seller can plan for fixes before closing.
- A check-in once you close
- A few months after you close, we call to see how the first payments went. We explain how your mortgage insurance works, when it can come off, and what to watch for on your escrow statement.
Signs an FHA Loan May Be the Right Fit
Your credit score is in the 500s or low 600s
FHA can work with scores a conventional lender may turn down. With a 580 or higher, the minimum down payment is 3.5%.
You have not saved much yet
If coming up with a large down payment would take years, FHA's lower requirement can get you buying sooner.
Your debt-to-income ratio is on the high side
Car payments and student loans can push conventional approval out of reach. FHA guidelines often allow more room.
Family wants to help with the down payment
FHA is friendly to gift money from relatives, as long as it is documented the right way.
You had a bankruptcy or foreclosure in the past
Once a waiting period has passed and you have paid on time since, FHA may let you qualify sooner than other loan types.
What Changes the Price of Your FHA Loan
No two FHA files price out the same. Your rate and fees depend on your own numbers and on the market the day you lock. We write out every charge on its own line, so the figures at the closing table are the ones you already saw. Here is what pushes the total higher or lower.
Credit score
Stronger credit tends to earn a lower rate. It can also bring down the smallest down payment FHA will accept from you.
How much you put down
With 10% or more down, the monthly mortgage insurance has an end date. Put down less, and it lasts as long as the loan unless you refinance out of it.
Property taxes and insurance
Both are collected each month through escrow. Tax rates are not the same in Pflugerville as in Hutto or other nearby areas, so two houses at one price can carry different payments.
Seller concessions
FHA allows the seller to cover some of your closing costs. If your agent asks for it in the offer, you may need less cash on signing day.
How an FHA Loan Works From First Call to Closing and After
- 1
Pre-qualify by phone
We go over your income and debts and, with your permission, check your credit. You come away with a realistic price range and a short list of paperwork to pull together.
- 2
Pre-approval and house hunting
Next we look over your bank statements, tax returns, W-2s and recent pay stubs. Then we issue a pre-approval letter your agent can attach to offers, whether you are looking in Round Rock or Manor.
- 3
Appraisal and underwriting
When a seller accepts your offer, we order the FHA appraisal and send the file to underwriting. If they ask for anything, we get it to you fast and explain why they want it.
- 4
Closing
Your closing disclosure arrives three business days before you sign. We walk through it with you, line by line, to make sure the cash to close and the monthly payment match what we quoted.
- 5
Follow-up once you own it
We call after your first few payments clear and again when your escrow gets reviewed. If rates fall or your equity reaches the point where a refinance could drop mortgage insurance, we tell you.
FHA Loan Questions
What credit score do I need for an FHA loan?
The FHA floor is 580 for the 3.5% down option. A score between 500 and 579 can still work if you put 10% down. Lenders add their own rules on top, so we go over your whole file by phone before we tell you where you stand.
Can I ever get rid of FHA mortgage insurance?
With 10% or more down, it comes off after 11 years. With less down, it stays for the full life of the loan. The usual way out is a refinance into a conventional loan after your equity has grown, and that is the number we keep an eye on during our follow-up calls.
Is there a limit on how much I can borrow?
Yes. FHA caps loan amounts county by county and updates those caps every year. When you pre-qualify, we give you the current cap for the county you are shopping in.
Can I use an FHA loan for a duplex?
Yes, as long as you live in one of the units. FHA works for properties with two, three or four units. Rent you expect from the other units may help you qualify.
Who will I be working with?
You work with a loan officer who has held an NMLS license for 10 years. That same person handles your questions up to closing and makes the check-in calls afterward.
Find Out if FHA Fits You
A short phone conversation tells you what you may qualify for and how much you would need down. We can also run rate quotes so you can compare FHA with a conventional loan.