An FHA Loan may help you get into a home with a low down payment.
Saving for a down payment can be one of the biggest challenges that a first time homeowner faces.
An FHA loan is government-insured and has some flexible features. FHA loans are not just for first-time homebuyers. The FHA offers great options if you have had prior credit challenges, need to take cash out of your property, or have limited funds for a down payment.
What is an FHA loan?
FHA loans are mortgages that are fully backed by the Department of Housing and Urban Development (HUD). When purchasing a home, the FHA only requires 3.5% down. Since the loan is backed by the Federal Government, FHA loans are possible even if a borrower has a low credit score, prior bankruptcy, or even a prior foreclosure.
What is required for an FHA loan?
The documentation for an FHA loan is very similar to that of any other mortgage loan. A lender will verify your employment history, the value of the property, and your debt-to-income ratio. If you have a score of at least 580, you can purchase a home with 3.5% down. Lower scores are possible with a larger down payment.
How do FHA Loans Work?
- Purchase or refinance a home with as little as 3.5% equity (vs 20% for most other loans)
- You are able to pre-pay your mortgage at any time with no prepayment penalty
Have Questions?
Give us a call at 888-404-4488. We have mortgage specialists standing by to answer any questions you might have.
