If you are planning to buy a
home – you may have been attracted to a government-backed Federal Housing
Authority loan. The primary reason for Federal Housing Administration loans is
to help homeownership more possible for those buyers who may not qualify for
conventional mortgages. The loan benefits of FHA are many – from low down
payment requirements to competitive FHA rates, and low FHA
Loan Interest Rates In Clifton.
There are certainly some pros
and cons of FHA loans – we will focus on the reasons why these mortgages are an
important tool for millions of homeowners.
Easy credit
qualification
FHS loan requirements are
easier than conventional loans. It is one of the easiest loans to qualify for
if you have less-than-perfect credit. Lenders are allowed to set
their own minimum – a common lender overlay is an FHA credit
score of 620.
The compensation factors for
FHA loans include:
·
Verified
cash reserve
·
Minimal
housing payment increase
·
Low
debt
·
Increased
earning potential
·
Substantial
non-taxable income
Low down payment
FHA loan requires a low down
payment – however, it is more likely to save up for your home than you can
imagine. FHA mortgages are designed to help borrowers who might not have 20% to
put down. The down payment required for an FHA loan is based on credit score. A
credit score below 580 is required to come up with a high down payment. Many
lenders require a credit score above 580 to qualify for low FHA Loans Interest Rate in Clifton.
More lenient on
gift fund
If you don’t have enough
funds for a down payment, you can still get the loan. FHA loan down payment
requirement allows gift funds to come from family, close friends, a union, or a
government down-payment assistance program. Those rules are not as strict as
conventional loans. There can’t be any expected repayment.
Low closing cost
There is more money-saving
news. A seller can pay up to 6% of the sales towards some of a buyer’s closing
costs. FHA loan closing costs can average 3% to 5% of the loan amount.
Negotiate to have the seller pay for some of these can help you get into your
home with fewer pockets:
Closing costs include:
·
Property
tax
·
Escrow
fee
·
Homeowners
Insurance
·
Title
insurance
·
Lender
fee
Wrapping up
You should talk to your real estate agent and loan officer if you want to negotiate or finance closing costs. These are all would work on your behalf to find the best solution. take your time to find the best FHA Loan Interest Rates in Clifton.