1. What is FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration. These loans are popular with first-time homebuyers because they allow lower down payments (as low as 3.5%) and have more flexible qualification requirements than conventional loans.

2. How Does the Calculator Work?

The calculator uses standard mortgage formulas:

Where:

• \( Price \) — Purchase price of the home
• \( Down Payment \) — Initial payment amount
• \( rate \) — Annual interest rate
• \( term \) — Loan term in months (360 for 30 years, 180 for 15 years)

3. Importance of Down Payment

Details: FHA loans require a minimum 3.5% down payment for borrowers with credit scores of 580 or higher. A larger down payment reduces your loan amount and monthly payments.

4. Using the Calculator

Tips: Enter the purchase price, your planned down payment, current interest rate, and select loan term. The calculator will show your loan amount and estimated monthly payment.

5. Frequently Asked Questions (FAQ)

Q1: What's the minimum down payment for FHA loans?
A: 3.5% for credit scores ≥580, 10% for scores between 500-579.

Q2: Are there other costs not included here?
A: Yes, FHA loans require mortgage insurance (MIP) which isn't included in this basic calculation.

Q3: What's the maximum FHA loan amount?
A: Limits vary by county and are adjusted annually.

Q4: Can I use gift funds for the down payment?
A: Yes, FHA allows gift funds from approved sources.

Q5: How does credit score affect the rate?
A: Lower scores may qualify but typically get higher rates.