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Benefits of FHA
Loans
Easier to Qualify: Because FHA insures your mortgage, lenders may
be more willing to give you loan terms that make it easier for you to
qualify (i.e. lower rates, longer repayment terms, lower down payments,
etc…)
Less than Perfect Credit: You don't have to have a perfect credit
score to get an FHA mortgage. In fact, even if you have had credit
problems, such as a bankruptcy, it's easier for you to qualify for an
FHA loan than a conventional loan.
Low Down Payment: FHA loans have a low 3% down payment. Best of
all, the down payment for your new FHA loan can come from a family
member, employer or charitable organization as a gift. Other
conventional loan programs don't allow gift money to be used as a down
payment.
Costs Less: FHA loans have competitive interest rates because the
Federal Government insures the loans. It’s always best to compare an
FHA loan with other loan types. For many buyers, and FHA loan is
their gateway to the American Dream of homeownership.
Helps You Keep Your Home: The FHA was formed in 1934 and is a
division of the US Government. You can rest assured that FHA and HUD
will be around for many years to come and will continue to work to
protect you, the homeowner. Should you encounter hard times after buying
your home, FHA has many options to help you keep you in your home and
avoid foreclosure. FHA refinance and FHA streamline refinance products
are available if needed in the future.
FHA insures
mortgages made by approved FHA lenders to individuals and non-profit and
government agencies that are approved to participate in HUD's programs;
HUD does not loan money to homebuyers. An FHA loan is normal mortgage
loan that can be obtained through any approved FHA loan center. FHA
loans are backed by the power and security of a government insurance
program. You get the money you need with the security of the United
States Government helping to secure your FHA loan.
Generally, to be eligible for an FHA loan, you must have a valid social
security number and have lawful residency in the United States and be of
a legal age to sign on a mortgage in your state. Lenders will verify
income, assets, liabilities, and credit history for all parties on the
loan. With an FHA loan, you cannot take an ownership interest in a
property without qualifying for the loan.
FHA's mortgage programs do not typically have maximum income limits for
qualifying, although you must have sufficient income to qualify for the
mortgage payment and other debts. Income limits may be present when
qualifying for down payment assistance or other secondary financing
programs (including those funded by HUD) that may be used in conjunction
with an FHA loan.
FHA does not have minimum credit score requirements, although past
credit performance serves as the most useful guide in determining a
borrower's attitude toward credit obligations and predicting a
borrower's future actions. Using FHA's established guidelines, FHA
lenders will make a credit determination based on the merits of each
case. While credit score is not a primary factor in qualifying for an
FHA loan, the recent crash of the sub-prime mortgage market has caused
lenders to tighten their credit lending guidelines. For a
conventional (non-FHA) mortgage, the minimum credit score requirements
are around 620 with many lenders. For FHA programs, it's widely
accepted that you can get a loan with as low as a 580 credit score
in the current market.
For
FHA Loans:
<< FHA
LOANS >>
For
HUD Homes and Foreclosures:
<< HUD
HOMES & FORECLOSURES >>
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