Entries by Brandon Staples

Loan Limit Increase for Conventional Loans

Fannie Mae, Freddie Mac Loan Limit Increases to more than $510,000 In a recent news release, the Federal Housing Finance Agency announced an increase in the maximum conforming loan limit by nearly $100,000 since 2016! Starting January 1, 2020, the conventional loan limits for Fannie Mae and Freddie Mac will be more than $510,000, an […]


If you are looking for a home mortgage with a low down payment, an FHA loan is a great option. The FHA has been helping buyers who don’t have the traditional 20% down payment saved, qualify for a mortgage. FHA borrowers pay mortgage insurance premiums until the loan is fully repaid. This is the compromise a borrower makes to get into a home without having to put a lot of money down. The mortgage insurance is the FHA’s premium to finance the home. The FHA mortgage insurance will last for the life of the loan. This is probably the biggest downside of the FHA loan. An FHA home mortgage is a loan insured by the Federal Housing Administration and the premium payments allow the loan to be guaranteed by the FHA-approved lender. This means that if a borrower fails to pay their mortgage and defaults on the home, the St. George mortgage lenders will be compensated by the FHA. 

The FHA loan comes with various advantages. In this post, we guide you through the important aspects of this type of home loan before applying for an FHA loan.


You can qualify for an FHA loan with a lower credit score compared to the score requirements for a conventional home loan. For borrowers who are still struggling to save for that huge down payment that a conventional loan requires, an FHA loan is a better option. This is considering that the credit score also takes into consideration the saving habits of the individual. Borrowers can qualify for a loan even with a credit score of 580. This is opposed to the conventional loans where the credit score requirement is 620 or higher.

The FHA loan qualification schedule is more forgiving of borrowers with past bankruptcies, foreclosure or short sales. There is a shorter waiting period after these credit delinquencies to qualify for an FHA loan.

Down payment requirements for an FHA loan is lower compared to conventional loans. A borrower can qualify for an FHA mortgage with as little as 3.5% down. In some cases, borrowers with lower credit scores, you may need a larger down payment (typically around 10%) to qualify. 


The mortgage interest rates on FHA loans are typically lower as borrowers with a credit score of 660 can qualify for similar interest rates as conventional borrowers with a score of 740. An FHA loan is considered a better option for those borrowers. Another reason why FHA loan rates could is lower is that Fannie Mae and Freddie Mac added loan-level price adjustments and guarantee fees to their loans that are passed onto the borrowers. 


If you are planning move forward with a Utah FHA refinancing option in the future, you will enjoy more benefits. This is because FHA loans provide a streamlined refinancing program, that minimizes the paperwork and the hassle associated with refinancing a conventional loan. St. George mortgage lenders can qualify an FHA refinancing request before ordering a property appraisal. In the end, this saves you money especially if the mortgage rates drop at the time of applying for the Utah FHA refinance. Borrowers under the FHA loan program have experienced an easier refinancing process with less hassle compared to a conventional loan refinance.


Down payment gifting is when your family member or an approved donor gifts you money to help cover part of your down payment. With an FHA home mortgage, you can have your entire down payment gifted to you! With conventional loans, down payment gifting is only acceptable to some of the time. This is a major advantage for borrowers opting for an FHA home loan but don’t have the entire down payment saved away. This option must be declared by obtaining a letter from the donor.


FHA loans can be assumed by a homebuyer, which means that if you are selling the house down the road, it’s possible that the person who buys it can take over the FHA loan. However, the requirements for the loan have to be met by the person purchasing the property. The benefit and features of the loan are also passed to the next homebuyer because if the seller is enjoying a low interest on the mortgage, the lower interest rate is paid. The buyer will have an advantage when reselling the property. All conventional mortgages are not assumable.


FHA loans have fewer requirements compared to a conventional loan. In terms of credit score, debt ratio, and down payments, an FHA is a more flexible option. If you are looking for a simpler route when it comes to financing a loan, you should take a look at an FHA mortgage, which has easier qualification requirements.

In closing, many finance sector experts expect that the future of the FHA mortgage loans is bright. You can expect that FHA loans will become more affordable over time. 

What Does it Mean to Refinance Your Mortgage?

Should I Refinance?

When homeowners refinance, it gives them access to a new mortgage loan replacing its existing one. Homeowners can customize the details of a new mortgage loan including the loan’s mortgage rate, loan length in years and the amount borrowed. So, what makes a refinance attractive? Refinancing can be taken advantage of to reduce the monthly mortgage payment, withdraw cash for home improvement projects, cancel mortgage insurance, among other helpful uses.

Here, we will break down the different types of refinance mortgages.

Rate and Term Refinance

This type of refinancing changes the interest rate and/or the length of the term and does not change the amount of principal. Perhaps the original mortgage terms made sense for you when you initially agreed to it but as time goes on, circumstances may change. For example, if you’re looking to trade your 7-year adjustable rate mortgage for long-term stability, doing a rate and term refinance into a 30-year fixed rate loan may be better for you. On the other hand, if you’re looking to pay off your mortgage sooner than later, you could also refinance into a shorter loan term.

What if the interest rate on your mortgage is significantly higher than current interest rates? You can refinance to get a better rate and help you save money on your mortgage monthly payments.

Cash-out Refinance

cash-out refinance is a refinance option where the new mortgage loan is for a larger amount than the current mortgage loan and you receive the difference between the two loans in cash. One of the most common reasons why homeowners do a cash-out refinance is to transform the equity (ownership) that’s been built up in their home into cash. This cash can be spent on home improvementspay off student loans, debt consolidation or other important financial needs.

This type of refinancing has slightly higher interest rates due to a higher loan amount. The cash-out amount limits to 80-90% of your home’s equity. For example, if your home has a value of $200,000 but your remaining mortgage balance is $100,000, then the equity in your home is $100,000. If you are needing $50,000 for a home improvement project or using it for other financial priorities, you can choose to refinance your loan for $150.000 and receive $50,000 in cash at closing.

HELOC (Home Equity Line of Credit) Refinance

This particular type of refinance is a loan that’s set up as a line of credit for some maximum draw instead of a fixed dollar amount. It is a revolving line of credit that uses your house as collateral. The bank gives you an amount that you may borrow and may access at any point in time. There are two main ways of tapping into this line of credit; writing a check or using a credit card that’s connected to the account.

If you’re a homeowner that has built some equity in your home and need some additional cash for helping your child pay for college, renovating your home or buying a car, borrowing money this way may offer low interest rates and improve financial flexibility.

Ready for the first step to refinancing your mortgage? Here at Sun American Mortgage we want to help you find the best possible solution and save you money at the same time. Call us to talk about some of your options, or start with our simple online application.  480-832-4343



August 14, 2018  by Cathy Ly 

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Don’t miss out! [Parade of Homes Details]

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What the heck is an escrow account?

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