The Benefits of a FHA Loan
FHA loans are a popular home loan choice for borrowers. Qualifying standards tend to be more flexible and down-payment requirements are lower when compared to other home loan options.
Read on to see what makes an FHA loan an attractive mortgage option and learn how you can take advantage of this home financing opportunity.
About FHA Loans
FHA loans are mortgages insured by the Federal Housing Administration. With an FHA loan, borrowers pay mortgage insurance, which protects the lender in case the borrower defaults on the mortgage.
Why are FHA Loans Popular?
Since the loan is insured, FHA loans are often offered at a lower interest rate and have qualification requirements that are less strict.
What You Need to Know About FHA Loans
Less-than-perfect credit is okay!
The minimum credit score needed for an FHA loan depends on the type of loan you need. For example, to get a mortgage with a down payment as low as 3.5 percent, you would need a credit score of at least 580. If your credit score ranges between 500 and 579, your minimum down payment will be about 10 percent.
If you have limited credit history, don't worry! FHA mortgages have special conditions, such as "nontraditional credit history or insufficient credit," that allows for applicants to still qualify if they meet certain requirements.
Call to learn more about these special conditions for FHA qualification!
Minimum down payment can be as low as 3.5 percent!
Many people worry they can't afford a home because of the traditional 20% down payment of other loan options. For FHA borrowers, the required down payment can be as little as 3.5 percent of the purchase price of the home. What's more, you can also use your savings to make the down payment! Other allowed sources of cash for the down payment can even include gifts from a family member.
Your closing costs may be covered!
The FHA permits sellers, builders, and even lenders to pay some of your closing costs. These costs can include the appraisal, your credit report, or title expenses. Use our Closing Costs Eliminator to see how CityWorth Mortgage can help you bring no money to your closing!
Call CityWorth Mortgage today to speak with an expert mortgage banker who can help you buy your new home with a FHA loan!