“Which Loan is right for me?”
Do you need a Conventional Loan? A VA Loan? What about an FHA Loan? Perhaps HUD Loans are the right choice? With so many options out there, and so much fine print (and all these acronyms!), it’s easy to feel overwhelmed by all the complicated information.
Because FHA Loans have become so popular in recent years we’ve decided to show you three reasons why this type of loan might be beneficial to you.
FHA Loans Require Less Money Down
Most home buyers assume 20% down. That’s the number. We’ve all heard that figure tossed around when it comes to down payments, but these days trying to come up with that amount of cash up front can be difficult. FHA loans take this into consideration and offer a 3.5% minimum down payment as the main selling point. If you find yourself looking to buy a home but don’t have large cash reserves, this loan gets you right back in the game.
FHA Loans Work with Less Than Perfect Credit.
So, you’re ready to buy a home and have cash set aside for a down payment, but less than perfect credit is holding you back. FHA loans were created with these very circumstances in mind! The minimum score for eligibility on an FHA loan is 500 and, while a score that low might force your down payment up a bit, the point is that this type of loan makes a mortgage a reality despite a less than perfect credit history.
Lower Rates and Higher Limits.
FHA loans can usually be secured with some of the lowest rates out there. And, athough mortgage insurance is required for this type of loan, you’ll most likely find yourself paying less from month to month than if you’d gone the conventional route. In addition, FHA loans have a higher loan limit than most conventional loans, which are forced to adhere to the rules of government backed programs like Fannie Mae and Freddie Mac. This can be a lifesaver for those living in high cost regions.
The right loan is out there somewhere, and if these benefits are factors in your decision making process for a home loan, than an FHA loan is an excellent option.