When first-time homebuyers are applying for the mortgage on their first home, there are a lot of different ways to get one. The FHA Loan from the Federal Housing Administration is one that is used quite a bit. FHA Loans are perfect for first-time homebuyers for a lot of reasons.
FHA has quite a few features that give it an advantage over other loan programs. They are designed to help people buy a home. The FHA is a success for these reasons.
FHA loans don’t require as high of a credit score as other loans. Usually, a 640 can get you moved into a home with an FHA loan. This is important to know, because it can take years off of the wait to buy a home for people trying to build their credit.
FHA loans only need to have a 3.5% down payment. With a Conventional loan requiring 20% down, this can help first-time homeowners that have been fighting high rents and student loan repayments buy a home much faster. It can also come from gifted funds, which are very carefully regulated in most cases. You can also use your 401K for your down payment with FHA.
30 year fixed rates for mortgages are also coming with lower interest rates for FHA than conventional. Part of this is because FHA requires a PMI payment every month. That’s Private Mortgage Insurance. It’s an insurance payment that you make to the lender to help guarantee them against losses. That way, they can also offer you a lower interest rate.
Debt to Income Ratio
They also allow a higher debt-to-income ratio than a conventional loan. FHA Lenders actually allow up to a 55% debt-to-income ratio percentage. Conventional mortgages only allow 45%. This additional flexibility helps get more people approved.
Call The Home Loan Expert Team in Louis at (314) 781-9700, Chicago at (773) 770-4727, Indianapolis at (317) 550-1515, Nashville at (615) 810-8555 or Birmingham, AL at (205)721-7656. You can always apply online at hero.loan for your VA Loan, and www.thehomeloanexpert.com for your other mortgage needs, and we’re also open on Saturdays and will come to you to help close your loan. We work hard to make it easy on you. Nobody gets lower rates on better loans than The Home Loan Expert, Ryan Kelley, why go anywhere else?