Federal Housing Administration Loans, or FHA Loans, can be a great alternative to traditional loan types!
An FHA Mortgage Loan is a great alternative for first time home buyers, especially those that do not have the credit score or the money down to do a traditional Conventional Mortgage, and still want a great mortgage with low interest rates. FHA loans only require 3.5% down, can have closing cost assistance, have low credit qualifying requirements, and yet can still have low FIXED interest rates.
Here just some of the benefits of an FHA Loan:
- Only 3.5% down payment required
- The down payment may be a gift
- Seller can pay closing costs of up to 6% of the purchase price
- Lower credit score requirements
- Low interest rates
An FHA loan can provide these features because it is backed by mortgage insurance. This insurance is represented as the private mortgage insurance (PMI) rate and is included in your monthly mortgage payment. To secure an FHA loan, you will also be charged the premium for this insurance equal to 1.75% of your loan amount. FHA does present a great option for many home purchasers. In particular, they really allow a lot of flexibility for borrowers that may have experienced some credit issues in the past. However, in my experience, MANY purchasers are pushed into FHA loans by loan officers that are simply not knowledgeable enough to fully explore all of the possible loan options. Before getting an FHA loan, feel free to call me for an absolutely pressure-free second opinion on the possibility of saving some money with the more favorable terms of a conventional loan.
FHA 203k Mortgage Loans:
An FHA 203k Loan features all the same benefits of a regular FHA Loan, but with the ability to make the necessary repairs to the home to bring it up to code and up to your individual standards.
Don’t miss out on the opportunity to find your dream house and turn it into your perfect home with an FHA 203k!