A Federal Housing Administration (FHA) mortgage is one of the best loan options for a first-time homebuyer. It has few eligibility requirements and they’re all easy to meet, meaning it offers many Americans the chance to take advantage of its benefits. First and foremost your down payment can be as low as 3.5% of your new home’s value. (If your FICO® credit score is below 580, that minimum could rise as high as 10%.) Compare this to a conventional mortgage, which typically requires a 20% down payment, and you can understand why so many homebuyers take advantage of the program.
If you have the ability to pay off an FHA loan early, you can do so without being inhibited by the typical penalty fees of a conventional loan. Your closing costs will also be lower than most loans, which will make things even easier if you’re truly strapped for cash.
An FHA Loan Is a Type of Government-Backed Mortgage Loan That Can Allow You to Buy a Home with Looser Financial Requirements. You May Qualify for An FHA Loan If You Have Debt or A Lower Credit Score. You Might Even Be Able to Get an FHA Loan with A Bankruptcy or Other Financial Issue on Your Record.
FHA Loans Are Available with Low Down Payment Options and Lower Minimum Credit Score Limits, But You’ll Also Have to Pay Mortgage Insurance.
The Option of a Low-Down Payment and More Lenient Credit Requirements Can Make FHA Loans Particularly Attractive for First-Time Home Buyers, Although You Don’t Have to Be a First-Time Home Buyer in Order to Qualify. Here Are Some Benefits of FHA Loans:
Credit Score Requirements Are Lower Compared to Other Loans.
Your Lender Can Accept a Lower Down Payment.
You Could Still Qualify for An FHA Loan If You Have a Bankruptcy or Other Financial Issues In Your History.
FHA Closing Costs Can Often Be Rolled into Your Loan.