Benefits Of Taking An FHA Loan

 

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.