Government-backed FHA loans feature low down payments
Obtaining financing for a home purchase can be the most challenging aspect of the process for many people, especially those with less-than-ideal credit scores. Federal Housing Administration (FHA) loans are designed for just that purpose, and licensed loan officers can help appropriate clients navigate the process and make their dreams of owning a home come true.
FHA loans are issued by private lenders, but what sets them apart is they are insured by the U.S. Government through the FHA. This provides a guarantee for the lender that if you default on your loan, the FHA will reimburse the lender. The power of this guarantee is what makes lenders willing to approve mortgage applications for borrowers who might not otherwise qualify for a loan.
While FHA loans are not perfect for every situation, they are an extremely popular option for many people because of the small down payment required, often as low as 3.5 percent. The FHA loan application process also makes it easier to use gifts of cash from friends or relatives to cover the down payment and closing costs rather than having to come up with that amount on your own.
Another benefit of holding an FHA loan is what can happen when you sell your house. A buyer can take over your loan if it is assumable, which means they can take advantage of lower interest costs because you likely have already gone through the highest-interest years of the repayment schedule. There is no guarantee the interest rate of your FHA loan will be lower than what it available at the time you sell your home, but it is a nice option to have if rates have gone up.
FHA loans also are popular for people who have gone through bankruptcy, since two or three years of good credit is often enough to qualify for FHA financing.
About Brenda Evans (NMLS379197)
Brenda Evans (NMLS379197) has been a mortgage loan officer in Las Vegas for more than 20 years, specializing in customization of loans that meet each client’s needs. Brenda helps clients become pre-approved, at no cost and with no obligation, so they know approximately what their payments and closing costs will be prior to looking for a home. Contact Brenda at Finance of America to discuss your mortgage loan at 702-682-0808 or visit www.foamortgage.com/bevans.