The Many Benefits of FHA Home Financing
If you’re trying to buy a new home, but aren’t sure where to start when it comes to looking for a home loan, an FHA may be a good place to start. This is a great option if you’re having trouble getting approved through traditional lenders.
Here a few benefits of FHA home financing.
Smaller Down Payments
While other loan programs require larger down payments for buying a home, an FHA loan allows you to buy a home with a down payment as low at 3.5%. Putting a down payment this small works for some people who are trying to purchase their first home, however, if you have more than 3.5% saved up, it’s better to put down as much as you can up front. Doing this will give you more borrowing options, and you can also save money when it comes to interest costs.
Credit Scores
If you’re looking to borrow money, and have a low credit score, you’re more likely to get approved for an FHA loan. If that 3.5% down payment is all you can make, you can have a credit score as low as 580 and still be approved. And if you’re able to put down a bigger down payment, you could potentially be able to have an even lower credit score. If you aren’t sure about your score, need credit advice, or know you don’t have any credit history, you should find a lender that can do manual underwriting, which allows them to look at alternative credit information to evaluate your creditworthiness.
They’re Assumable
If you’ve purchased your home through an FHA loan and you’re looking to sell, the buyer has the added benefit of the FHA loan being assumable. This means that the buyer can take over the seller’s’ existing FHA loan instead of taking out a new mortgage. This is especially convenient at a time when rates continue to rise. While this seems like the perfect scenario, the buyers still need to meet all the typical mortgage requirements, and also may need a much larger down payment depending on the equity of the seller.
If you’re looking for an FHA loan to purchase your new home, Pacor Mortgage can help you through the entire process. Give us a call today at 773-881-7744 to set up an appointment, or visit our website to learn more about the FHA loans we offer.
