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.
References:
https://www.hsh.com/finance/government/fha-mortgage-advantages.html
https://www.thebalance.com/fha-loan-basics-315656
2018 Pacor Mortgage Corp. Pacor Mortgage Corp is located at 14930 S Cicero Ave, Oak Forest, IL 60452, Phone 773-881-7744 (Unique Identifier #120945). Pacor Mortgage Corp is an equal housing lender and is licensed by the Secretary of State under the Illinois Residential Mortgage Lending Act and is assigned Illinois Residential Mortgage License MB.0000892. Pacor Mortgage Corp branches operate with the following licenses and is assigned Illinois Residential Mortgage License MB.0000892-001, with a Wisconsin License # 260345BA, Palos Heights NMLS 261297 and is assigned Illinois Residential Mortgage License MB.0000892-008, Indiana DFI 13177, Wisconsin 120945BA, Michigan FL0828, Michigan SR1130, Florida, Pennsylvania 43855, Colorado, California, Kalamazoo, MI NMLS 120945 also DBA Lake Pacor Home Mortgage, Westlake, Ohio DBA US Lending Corp MB.804151.000. This is not an offer for an extension of credit, a rate lock or a commitment to lend. All loans must satisfy company underwriting guidelines and any investor overlays. Any of the advertised products may be discontinued at any time. Information and pricing are subject to change at any time and without notice. Loans are being committed and closed at expressed rates although these rates change and may not be available at time of your lock in, commitment and / or closing. Pacor Mortgage Corp is not affiliated with your current lender, nor is it an agency or extension of the Federal Government, Fannie Mae, Freddie Mac or HUD.