Home buyers may have trouble qualifying for a conventional mortgage loan if they have credit problems. In those cases, a FHA loan could be a better option. This type of home loan is available for one-to-four family properties, Planned Unit Developments (PUDs), condominiums, and manufactured homes.
The FHA, or Federal Housing Administration makes it easier to qualify for a loan with more favorable terms by insuring your mortgage. FHA-insured mortgages offer many benefits and protections to the borrower.
How Can FHA Help Me?
One of the great things about FHA loans are that you can buy a home with a down payment as small as 3.5% down, and credit scores as low as 580. There are even options if you have a credit score below 580!
FHA loans tend to have lower interest rates than conventional loans.
The FHA product has been around since the 1930s and will continue to be here to safeguard you. Should you encounter hardships after buying your home, FHA has many options to help keep you in your home and avoid foreclosure.
An FHA-insured mortgage can be used to purchase or refinance a new or existing one-to-four family house, a condominium unit, or even a manufactured housing unit.
Other Things to Consider
Another aspect of FHA mortgages are maximum loan limits. This means that your loan cannot exceed a certain value based on where you live. You can check the loan limit for your county here.
Another aspect of a FHA loan is the Mortgage Insurance Premium, or MIP. This is a required insurance that covers the FHA in case of loan default. There is an upfront premium that gets financed into your loan amount, and a monthly premium that gets added on to your mortgage payment and remains for the duration of the loan.
FHA Mortgage Loan Features
- Low down payment options
- Flexible income, debt and credit requirements
- You may be able to use a gift or grant toward closing costs and all or part of the down payment
- A variety of fixed-rate and adjustable rate loan options
- You may add extra features, such as a temporary buydown
FHA Mortgage Loan Benefits
- Requires less cash up front for your down payment and closing costs
- Available for all income levels
To learn more about FHA Loans, contact our Cliffco Mortgage Bankers loan specialists at (516) 231-1654 or email firstname.lastname@example.org. Each one of our licensed experts can help answer any questions you might have, guiding you every step of the way through the loan process. We look forward to hearing from you!