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FHA Loans In A Nutshell
FHA loans are a great help to many first time home buyers. By offering mortgages with far lower down payments, the FHA loan is an amazing route to consider when buying. While this is a benefit for many, recent changes in the approval policay may have put the loans just out of reach for some future homeowners with less than favorable credit history.
(Image Credit: https://www.fha.com/fha_credit_requirements)
Applicants with a credit score of 580 or higher can qualify for the low down payment advantage and may only be required to bring 3.5% down. Those with a lower credit score than 580 are not excluded from the FHA loan eligibility, however they will have to bring 10% down payment if they want to qualify for the loan.
So those of you planning to purchase a home with a slightly lower credit score, you may want to consider the pros and cons of having to put down a larger down payment or using the funds to first improve your credit score.
Why FHA Loans?
FHA loans are popular because homeowners that use them are able to utilize the benefits and protections which FHA loans provide which are unavailable with other traditional mortgage loans. Loans through the FHA are government insured so lenders are generally more lenient. A few of benefits you can expect with an FHA loan are as follows:
No CreditThe FHA usually requires two lines of credit for qualifying applicants. If you don't have a sufficient credit history, you can try to qualify through a substitute form.
For many buyers, using the FHA loan program can truly make all the difference between owning your dream home comfortably, or entering into a financial disaster. The FHA provides a wealth of other benefits for those who qualify so make sure to research them and take full advantage of them when you buy your new home!
As a Full Time real estate agent for the past 23 years, Sheryll has helped hundreds of home owners in Colorado buy and sell their homes. Sheryll's easy going, no pressure style and her in depth knowl....