There is a misconception that FHA programs are only for people with low income and bad credit. That is not true at all! FHA loans are actually the most popular mortgage loan, and up to half of all home loans in the US are made through FHA.
The first-time home buyer is typically a working family. We all know how hard it is to put money away with everyday bills and expenses, and many people have had financial struggles in the past but are now back on their feet. Buying a home is one of the best opportunities to accumulate wealth for people in this situation.
With FHA, people who can demonstrate an ability to pay are not excluded from buying a home.
What are the benefits of FHA?
- Easier to qualify for
- Interest rates are lower than a conventional loan
- Low down payment (as low as 3.5% with a 580 FICO score or 10% with a 500 FICO)
- 100% of down payment money can be gifted, while conventional loans only allow for a portion
- Seller can pay closing costs up to 6% using Seller Assist
- Non-occupying co-borrowers/co-signers are allowed
- Higher DTI (debt-to-income ratio) is accepted, up to 50%
- No pre-payment penalty
- Loan is assumable, while conventional loans are not
- Easy to refinance through the FHA streamline program
- Flexible terms (15 or 30 year, fixed or adjustable rate options)
- Can be paired with down payment assistance programs or grants
Other considerations
There are many factors involved in FHA and you need to work with an experienced loan officer to make sure you are getting the best rate and terms.
Furthermore, you want to have every option available to you. You may qualify for an FHA loan but there could be other programs out there that make more sense for you. Or vice versa, you may not qualify for FHA due to derogatory credit history or income verification, yet there may still be options for you if you have a significant down payment/LTV up to 65%.
At HP Mortgage LLC we will look at your individual scenario and pair you with the loan that puts you in the best position, whether it is FHA or one of our numerous other programs.
Please fill out our contact form or give us a call at 267-269-8900 today!
NMLS# 1456273
