If you are in the market to purchase a home, you have probably done lots and lots of research. You have probably spent hours looking at homes online, browsing Zillow and Realtor, maybe even reaching out to a realtor if you found something that really sparked your interest. The excitement of looking at homes can sometimes overpower the reality of what it actually takes to buy that home. One of the best things new homebuyers can do is to start their search by researching financing. There are several types of loans and lenders available, so finding the best one for your financial situation is going to save you a lot of hassle and money in the long run.
FHA loans are a great way for first time home buyers to secure financing to purchase a home especially if they have less than perfect credit or lack a large down payment. FHA loans are accessible to a wide range of people and are backed by the government so they aren’t as risky as other types of financing. FHA loans are a good route to consider because if you decide you would like to sell your home, it is an assumable mortgage, which means the loan can be transferred to the new buyer.
How To Qualify
The first thing you’ll do is prepare and review your finances. Your credit score is very important when discussing finances with a lender so you want to do whatever you can to make sure it’s at the highest it can possibly be, but it needs to be over 580 for an FHA loan. You’ll also need a down payment but it’s only 3.5 percent which is a lot less than you would need for other mortgages.
These are the two most important requirements that are needed to qualify for an FHA loan but there are others listed below:
-Social security number
-FHA loan must be used for a primary residence
-Front and back end ratios must fall under specific percentages
-No recent foreclosures or bankruptcy
Things To Consider
An FHA loan is fairly easy to qualify for, especially in comparison to a conventional loan so that means there are some stipulations that must be met on the back end. You must have mortgage insurance if you want to secure an FHA loan. The first type of insurance premium is paid in full and the other is a monthly payment.
Call Us Today
We know that purchasing a home comes with many choices and lots of ups and downs but the process itself can be truly rewarding and very educational as well. At North Star Mortgage in Jacksonville, FL we want to make sure we are here for you from the first step to the last, so don’t hesitate to reach out today.
FHA loans are an attractive option, especially for first-time homeowners because it is insured by the Federal Housing Administration (FHA). Primarily, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments.Typically the borrower can be approved with 3.5% down vs 20% that is required on other loan programs.