FHA Loans were created to make home ownership a reality for as many Americans as possible. These special mortgages are federally insured and offered through independent lenders. If you have ever thought that obtaining a competitive mortgage would be difficult or even impossible in your financial situation, then an FHA Loan is something that you’ll want to take a closer look at.
These are the most common questions and answers that will help you when you are looking for an affordable home loan.
Who Benefits Most from an FHA Loan?
FHA Loans are government insured, which means that there is very little risk for lenders. Home buyers with less than perfect credit are the biggest beneficiaries of FHA Loans. If you have issues on your credit report, or even if you are currently in debt, then you may be able to qualify for an FHA Loan. Lending criteria is heavily relaxed when compared to conventional loans.
Is A Down Payment Required?
Yes, a down payment is necessary for every FHA Loan. The good news is that this payment will be significantly lower than similar conventional loans. The minimum deposit is 3.5%, however, it is recommended to make a larger deposit if possible, as this will reduce the borrowed amount and ongoing payments will be more affordable.
Can I Get an FHA Loan If I’ve Had a Bankruptcy in the Past?
Yes, providing that you meet certain requirements. This is only a problem if you have come out of Chapter 13 bankruptcy within the last 12 months, or Chapter 7 bankruptcy within the last 24 months. If your bankruptcy was cleared outside of these timeframes, then you can apply for an FHA Loan today.
Are There Extra Fees Associated with FHA Loans?
FHA Loans are like other mortgages where you will pay interest for the loan, and you will also be required to pay homeowner’s insurance during the loan. In addition to this, FHA Loans require mortgage insurance payments. The insurance supports the FHA program and ensures that the government can back these loans through independent lenders.
Are Interest Rates Fixed? Can I Refinance?
Interest rates are fixed on FHA Loans. Most lenders will offer 15 and 30-year fixed rate mortgages. Loans can also be refinanced, so there is actually a surprising amount of flexibility when you choose to borrow with an FHA backed loan.
The Easiest Way to Make Your Most Important Investment
If you’ve had some blemishes on your credit report and are having trouble securing a conventional loan, then an FHA Loan is the obvious choice. It’s the easiest way to make one of the most important investments of your lifetime.
You may be interested
Job Hiring is Picking Up as Employers and Consumers Gain ConfidenceLamont J - March 29, 2021
The recent government stimulus for small and medium-sized businesses, personal stimulus checks, and declining Coronavirus cases, are all great news…
Fed Could Maintain 0% Interest Rate Until 2024Adam R - March 26, 2021
The Federal Reserve is holding its target interest rate in a range of 0.00% - 0.25%, even while the economy…