FHA loan benefits:
- Low cost down payments
- Low costs at closing
- Those with lower credit score can still qualify
FHA is great for first time home-buyers.
FHA loans can offer down payment as low as 3.5% for good credit applicants and it allows for the majority of the fees and closing costs to be covered by your loan. FHA loans can be available for properties with up to 1-4 units.
FHA also covers homes that you plan to repair or remodel.
Apart from fees and closing cost, FHA loans allow for you to include all the costs for repairs on your new home into one loan. If you’re already a home owner and would like to refinance including repairs and re-modeling costs into your loan is also possible.
FHA can help make your home more energy efficient.
If saving money on energy costs and an eco-friendly home is important to you, you can include energy improvement costs into your loan.
FHA can cover any home, including mobile homes and manufactured housing.
FHA has financing loans for those in mobile home parks and landowners of manufactured housing.
What Does FHA Have To Offer Me?
FHA loans are mortgage loans, or home loans that assists a buyer in purchasing a home whom otherwise might not be able to. These mortgages are insured by the Federal Government, and protect the lender from losses that may be suffered if the home ends up going into foreclosure. FHA is more lenient compared to conventional loans in that they don’t require a minimum credit score to qualify, with most borrowers requiring a down payment of only 3.5% of the home’s purchasing price.
For those with lower credit scores, getting assistance when trying to buy a new home can be difficult. With FHA loans, you won’t be disqualified simply for having low credit. Often, buyers with lower credit can still get approval by demonstrating their ability to pay back their loans at a slightly higher down payment rate. Underwriters typically review credit and financial history from the last 1-2 years. If those records look good, customers can often get approved even when they have struggled with getting Conventional financing approval in the past. It is because of this and the customer’s ability to explain their credit difficulties that FHA often tends to be more flexible than Conventional mortgages.
For an FHA mortgage, buyers must make a down payment of at least 3.5% or more of the sales price. Total additional costs of receiving an FHA loan is generally 6-8% of the sales price when covering down payment, cost to close, taxes, insurance, and interest rates. Money to cover costs for the down payment and other rates can be covered by your personal savings, grants and loans, retirement funds, and even gifts from family members. Applicants must have a steady employment history and a valid Social Security number, and property must be assessed and approved by an appraiser in order to qualify for FHA.