ServicesFHA Loans
FHA Loans in Round Rock
An FHA loan lets you buy with a small down payment and a credit score that isn't perfect. We go over your numbers early, show you the real monthly cost with mortgage insurance, and get your pre-approval ready before you find the place you want.
What an FHA loan is and who it fits
An FHA loan is a home loan backed by the Federal Housing Administration. Because the government takes on part of the risk, lenders can accept a smaller down payment and a lower credit score than most conventional loans allow. Under current rules, a score of 580 or higher can qualify with 3.5% down.
It fits first-time buyers, people rebuilding credit, and borrowers whose debts run a little high next to their income. The trade-off is an extra premium the FHA charges, called MIP. You pay an upfront premium, usually rolled into the loan, plus a monthly one. Put down less than 10% and that monthly premium stays for the life of the loan unless you refinance later.
We like to talk with buyers a few months before they shop. That is often enough time to pay down a card, clear an old collection or line up gift money, and any of those can change your rate or your approval. If a conventional loan comes out cheaper for you, we will show you that side by side.
What we handle on your FHA loan
Credit and budget review
We pull your credit, look at income and debts, and tell you the payment we would be comfortable with. That is not always the biggest number you could qualify for.
Down payment and gift funds
FHA lets family, an employer or an approved assistance program cover your down payment. We explain the gift letter and the bank paper trail the underwriter wants, so the money does not hold up closing.
Pre-approval letter
Once your documents check out, you get a pre-approval letter to hand your agent. Sellers expect to see one with an offer.
Side-by-side comparison
We line up FHA against a conventional loan, and a VA loan if you served, using the same price and down payment. You see the monthly payment, mortgage insurance and cash to close for each.
Property standards heads-up
FHA appraisers look for safety and soundness problems like peeling paint on older properties, missing handrails or a worn-out roof. We tell you what tends to get flagged so you can ask about it before you are under contract.
Closing coordination
We work with your agent, the title company and the underwriter so conditions get cleared in order. You see your final numbers before closing day, not at the table.
Signs an FHA loan may be the right fit
- Your savings are thin
- You can cover a small down payment and closing costs, but saving a larger chunk would take years. FHA lets you buy sooner without draining every account.
- Your score is in the 500s or low 600s
- Conventional pricing gets steep at those scores. FHA rates tend to hold up better for borrowers in that range.
- Your debts run high next to income
- Student loans or a car payment can push you past conventional limits. FHA underwriting often allows more room when the rest of the file is solid.
- You had a past setback
- A bankruptcy or foreclosure does not shut you out for good. FHA sets waiting periods, and we can map out when you would be eligible and what to do in the meantime.
- Family wants to help
- Gift money can cover the whole down payment. We make sure it is documented the way the underwriter needs.
How an FHA loan moves from first call to closing
- 1
A phone call to start
We talk through your goals, timeline and rough numbers. We can pre-qualify you on that call or begin the full loan application.
- 2
Documents and pre-approval
You send pay stubs, two years of W-2s or tax returns, bank statements and ID. We meet at our office or by phone and video, review it all and issue your pre-approval.
- 3
Offer and appraisal
When your offer is accepted, we order the FHA appraisal. If the appraiser asks for fixes, we tell you right away and help you sort out with the seller who handles them.
- 4
Underwriting
The underwriter checks the file and may ask for a few more items, like a letter about a large deposit. We tell you exactly what is needed and why.
- 5
Closing
You get your closing disclosure ahead of time to compare against your estimate. Then you sign, fund and get the keys.
What affects the cost of an FHA loan
No two FHA loans cost the same. Your rate, mortgage insurance and closing costs depend on your file and the property. We put each line in writing before you commit, so you can plan your budget instead of guessing.
- Credit score
- A higher score usually means a better rate. Sometimes raising your score by a few points before you apply makes a real difference over the years.
- Down payment size
- Putting down 10% or more lets the monthly mortgage insurance drop off after 11 years. Less than that and it stays unless you refinance.
- Loan amount
- The upfront premium and monthly insurance are figured as a share of what you borrow. A larger loan means larger premiums, even at the same rate.
- Seller help with closing costs
- FHA allows the seller to pay part of your closing costs. How much you negotiate in the offer can change the cash you need on closing day.
- Rate lock timing
- Rates move. When you lock and how long the lock lasts both affect your price, so we plan the lock around your expected closing date.
FHA loan questions we hear often
- Can I use an FHA loan to buy a rental property?
- No. FHA is for a primary residence, and you are expected to move in and live there. You can buy a two-to-four unit property with FHA if you live in one of the units. For pure investment buys, our Hard Money Loans or Bank Statement Loans may fit better.
- Can I ever get rid of FHA mortgage insurance?
- If you put down 10% or more, the monthly premium ends after 11 years. With less down, the usual path is refinancing into a conventional loan once you have built enough equity. We can help you plan when that might make sense.
- Is there a limit on how much I can borrow with FHA?
- Yes. FHA sets loan limits by metro area and updates them each year. We check the current limit for the area you are buying in before you start shopping, so you know if FHA covers your price range.
- Will a seller turn down my offer because it is FHA?
- Some sellers worry about the appraisal. A solid pre-approval and knowing the property standards ahead of time take away most of that worry. Your agent can also point out that FHA buyers close just like anyone else when the file is ready.
- How long does an FHA loan take?
- It depends on how fast the appraisal comes back and how quickly documents come in. Starting early helps most. If your pre-approval is done before you make an offer, the rest moves faster.
Plan your FHA purchase before you start touring
A short phone call tells you what you can likely borrow, what the down payment looks like and what to fix first. From there we can start your application whenever you are ready.