If you are a first-time homebuyer or a repeat homebuyer without an ideal credit score, or with a limited down payment, an FHA loan may be the best option for you.
FHA mortgages are backed by the Federal Housing Administration (FHA). With the FHA insuring your loan, the risk associated with lending to you decreases. This qualifies you for affordable mortgage rates and favorable terms.
The FHA loan program is nationwide. So no matter where you are located, you may qualify for an FHA mortgage.
These are some of the advantages of FHA mortgages:
FHA loans have flexible qualification requirements. Neither your credit score nor your debt-to-income (DTI) ratio need to be perfect in order to be eligible for all the benefits of FHA financing.
You may choose whether you would like a fixed or adjustable mortgage rate for an FHA loan. Interest rates for FHA mortgages are much lower than conventional loans.
Down payments for FHA loans can be as low as 3.5% for those who have credit scores of 580 and above.
If you take out an FHA loan, you will pay low closing costs, if any. The seller frequently covers the closing costs for this type of loan.
An FHA mortgage can be used for home purchase, refinancing, upgrades, or repairs.
The FHA loan program is targeted toward first time homebuyers. But you do not need to be purchasing your first home to be eligible for an FHA loan. These are the requirements that you do need to meet:
As previously discussed, to qualify for an FHA purchase with 3.5% down, your credit score must be a minimum of 580. Or if your score is between 500 and 579 you are required to put 10% down.
You may qualify for an FHA mortgage with a DTI as high at 56.9%.
Two years of continuous employment are required at a minimum. These need to be the most recent two years before submitting your application. There are some exceptions to this such as leave for medical reasons or just graduating from college.
A clear credit alert interactive voice response system (CAIVRS) report is required (we will obtain this for you).
FHA mortgages are available only for primary residences, not for second homes or vacation homes.
A bankruptcy or foreclosure will not automatically disqualify you for an FHA loan.
Note that with an FHA loan, you will be required to have private mortgage insurance (PMI). But through our Lender for Life guarantee program, you can refinance with no fees in the future to a conventional mortgage with no PMI.
If you look forward to buying a home with a down payment as low as 3.5% and making affordable mortgage payments over the lifetime of your loan, apply now for an FHA mortgage. To get started with your application, please call (800) 293-2133. We can connect you with an FHA mortgage in any of the 50 states.
The Best Home Loans is an Equal Housing Lender. As prohibited by federal law, we do not engage in business practices that discriminate on the basis of race, color, religion, national origin, sex, marital status, age, because all or part of your income may be derived from any public assistance program, or because you have, in good faith, exercised any right under the Consumer Credit Protection Act. Disclaimer: Programs subject to change without notice. All borrowers must qualify per program guidelines.