Finance

Before Purchasing A Home, You Need To Know All About FHA Loans

Purchasing a home is one of the biggest and the most important decisions that you have to make in your life. Once you are ready, getting a mortgage is your best choice. It is convenient and easy! However, there are plenty of options for you to choose from. There are also instances when this process can become complicated. If this is the case, then you need to know more about one simple option – FHA Loans!

The FHA Loan

If you do not qualify for a conventional mortgage, then know that FHA loan is the solution that you have been looking for! This is a mortgage that will allow you to purchase a primary residence with a very low down payment. This is also insured by the Federal Housing Administration. The FHA Loans help families to become homeowners by lowering the cost of financing and also the down payment barrier when purchasing a home.

Why Choose FHA Loans?

FHA Loan is by far one of the best options when purchasing a home. There are so many reasons why you have to choose them, but to help you decide, here are the benefits of an FHA Loan that might pique your interest:

  • Credit Scores. If you have a credit score of 580 or higher, FHA will allow you to obtain financing without a problem. If for example you do not have FICO scores but you can provide other acceptable alternative credit, you can possibly qualify. FHA also has shorter waiting periods compared to the conventional loans, especially to borrowers who have credit issues, like bankruptcy, foreclosure, or maybe a short sale, as long as you have re-established credit.
  • Low Down Payments. When getting a mortgage, the down payment is one of the most common problems that borrowers have to face. FHA has a minimum down payment and it can be as little as 3.5% on most types of properties available. These mortgages are insured by FHA which will then allow the borrowers to finance 96.5% of the value of the home purchase.
  • Gift Funds For Downpayments. With FHA, borrowers would be able to make a down payment and it can be 100% gift funds from a family member or maybe from a charitable organization. This is one of the most important benefits of an FHA program. You would need to go through with the verification process for the source of the gift money, but remember that cash gifts are not allowed.

Owning a home is very important, especially if you have a growing family. This is one of the major investments in your life, but sometimes, achieving this can be difficult, especially if you do not have enough money for a down payment, or if you have a not-so-impressive credit history. Thankfully, FHA Loan has solutions to offer you. So what are you waiting for? Pop over to these guys if you want to know more about your options.