How do you know if an FHA loan is right for you?
The Federal Housing Administration (FHA) offers a number of programs that promote home ownership. Because it requires a relatively small down payment, an FHA loan might be the perfect way for you to purchase your first home. An FHA loan may not put you in a billionaire’s palace, but you will have the option to purchase a beautiful starter home that suits your lifestyle.
FHA home loans are insured against home owner default by the FHA. This protects the lender from financial loss and increases your chances of being accepted. You are charged a modest upfront mortgage insurance premium which is included in your monthly payment.
Qualifying for an FHA Loan
You’ll be encouraged to know that it is not difficult to qualify for an FHA home loan. You will need a decent credit history, but it does not have to be excellent. You will also need a reasonable debt-to-income ratio.
You will likely be approved for a small home loan relative to the market prices of homes in your search area. Mortgage Solutions Financial can help you determine the FHA mortgage limits for your region. One of the greatest advantages of FHA loans is the ability to purchase with a down payment as low as 3.5 percent.
FHA Loan Benefits
There are more benefits to FHA loans such a lack of prepayment penalties. An FHA loan is assumable by another buyer if you decide to sell. Ask us if you qualify for an FHA home improvement loan. If you do you could remodel your starter home and, with a little creativity, afford your own dream home!