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If you're applying for a first-time FHA home loan, you're likely wondering how long your mortgage will be and what kinds of options you might have for shorter or longer loans, early payoff or what happens if you just pay the monthly mortgage minimum.

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FHA.com is a privately owned website, is not a government agency, and does not make loans.

How Long are the Terms for FHA Mortgages?

April 16, 2013

How Long are the Terms for FHA Mortgages?
If you're applying for a first-time FHA home loan, you're likely wondering how long your mortgage will be and what kinds of options you might have for shorter or longer loans, early payoff or what happens if you just pay the monthly mortgage minimum.

The answers depend on the kind of loan you apply for, the terms you agree upon, and how much you pay each month over the lifetime of the loan. In terms of basic options, FHA mortgages are either 15-year or 30-year loans. The longest of time you can be legally obligated to the original FHA home loan is 30 years. If you refinance the amount of time you spend paying on the mortgage may vary, but the original loan will be 30 years or 15.

How is the length of the mortgage calculated? When does the clock start ticking on a typical 30-year FHA loan? According to the FHA official site, "The maximum mortgage term may not exceed 30 years from the date that amortization begins. In the case of adjustable rate mortgages (ARMs), the term must be for 30 years. FHA does not require that loan terms be in five year multiples."

When it's time to explore your financing options, you may find shorter loan terms available. Certain FHA Streamline Refinances without an appraisal, for example, require these shortened terms. FHA loan rules for Streamline Refinance loans and the maximum loan term as found in HUD 4155.1, which states:

"The streamline refinance mortgage term is the lesser of
  • 30 years, or
  • the remaining term of the mortgage plus 12 years."
Regardless of whether or not you refinance, the actual length of time you would be obligated to pay on the original mortgage changes when you pay more than the minimum mortgage payment due each month-paying more every month can shorten the loan term.

Best of all? There is no early payoff penalty charge with an FHA home loan, you can feel free to pay more each month or whenever the borrower feels it's necessary. FHA borrowers cannot be required to pay penalties for paying more on their mortgage loan regardless of how much more that amount may be--if you have concerns about early payoff issues, discuss your needs with the lender or contact the FHA directly for assistance.

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