The FHA (Federal Housing Administration) has been helping people buy homes since 1934. This popular loan program was developed to encourage home ownership during the very difficult times of that era and FHA has been helping buyer’s ever since! How do they do it? FHA insures the new mortgage loan which allows the lender the ability to offer low rates with a minimum down payment. The insurance reduces or removes the risk lenders face when buyers are utilizing such low down-payments. Here are a few of the primary benefits of choosing an FHA loan:
- Your down-payment can be as low as 3.5% of the purchase price.
- Down-payment monies can be, all or in part, gifted from a family member. This makes it easier for people with less in savings to buy a home.
- FHA loans have relaxed rules regarding credit and past credit issues.
- The seller is allowed to pay up to 6% of the purchase price to cover the buyer’s closing costs and pre-paid expenses, again, making it much easier for people with less in savings to buy a home.
- An FHA loan has no pre-payment penalty and is even assumable (a great feature when the time comes to sell your house).
- FHA offers buyers very competitive interest rates.
These are just a few of the benefits of choosing an FHA loan. With an FHA loan and a knowledgeable FHA loan specialist, you can move smoothly and quickly toward the goal of buying or refinancing a home. You get the benefits of FHA’s unique features and the lender gets the knowledge that the loan is insured against any problems that could arise in the future. A true win-win situation! Please let us know if you’d like to learn more about FHA loans and how they can help you meet your goals.