If you’re planning on getting a house but can’t get past the hurdles of qualifying for a loan, don’t lose hope just yet. The Federal Housing Administration or FHA allows borrowers to get the loans they need without getting too deep into debt. If you’re wondering how FHA Home Loans work, here are 9 things that you need to know about them:
An FHA home loan lets you take advantage of a low down payment
Lenders usually require you at least a 20% down payment. You could go lower than that but you’d need to buy into a private mortgage insurance which is going to add up to your monthly costs. However, the FHA will let you provide a down payment of just 3.5%, which is considerably smaller. You could also use money loaned or given to you by family members, which isn’t allowed by your regular lender.
It’s easier for qualify for FHA loans
Lenders that work alongside the FHA will cut you some slack when it comes to qualifying for FHA Home Loans Myrtle Beach. This gives some leeway to first-time homebuyers, giving them a chance to buy the house they want without stressing too much about their finances. Even if you’ve filed for bankruptcy before or a not so stellar credit, you could still get an FHA home loan, but under certain guidelines.
Interest rates are lower for FHA home loans
If you’re worried about the interest rates, you shouldn’t. If you’re planning on applying for an FHA home loan, you should know that interest rates are lower than the average interest rates offered by non-FHA lenders.
You can prevent a foreclosure with FHA loans
If you’re defaulting on your existing mortgage, the FHA can help you out. They have this initiative called Making Home Affordable Program which will help reduce your loan payables to avoid foreclosure.
Disaster victims can seek refuge in FHA loans
The FHA has a program that aids people who lost their home to natural calamities. The FHA program provides 100% financing for the reconstruction of severely damaged homes.
The FHA can help you repair or upgrade your home
The FHA also has a program that grants loans to borrowers to upgrade or repair their homes. The Energy Efficient Mortgage program makes this possible.
An FHA loan can benefit older people
Through what’s known as reverse mortgage, people who are 62 and older can increase their income. That’s made possible through the FHA Home Equity Conversion Mortgage program.
Lower closing costs
If you haven’t bought a home just yet, you should know that there are lot of fees ahead. For those who have already gone through the process of buying a home, they would know that the fees could be significant. However, with the aid of an FHA loan, closing costs could be lowered quite considerably.
FHA partner lenders may offer different loan terms
Not all FHA-accredited lender offers the same loan terms. It is a good idea to look around for a lender that offers the best deal on mortgage rates and loan terms.
Want to buy a house at the lowest mortgage rates possible? Call MB Mortgage Pros today.
MB Mortgage Pros
630 Chestnut Road
Myrtle Beach, SC 29572