FHA loans are popular, especially for first-time homebuyers, because their requirements are not as strict as conventional loans. The loan is insured by the Federal Housing Administration (FHA) and comes with a down payment as low as 3.5%. An FHA loan also doesn’t require the borrower to have a high credit score.
Think you might qualify for an FHA loan? Here are a few things to know:
- It’s one of the easiest types of mortgages to qualify for.
- Borrowers who cannot afford a 20 percent down payment, have a credit score lower than 680, or can’t get approved for private mortgage insurance should consider an FHA loan.
- The loan is assumable, which means if you sell your home the buyer can assume the loan you have.
- FHA loans don’t have strict standards, but do require two kinds of mortgage insurance premiums – one that is paid in full upfront (or it can be financed into the mortgage) and the other that is a monthly payment.
- FHA loans require that the home meet certain requirements and be appraised by an FHA-approved appraiser.
- Borrowers must have a steady employment history or have worked for the same employer for the past two years.
- Borrowers must be a lawful resident of the United States, have a valid Social Security number and be of legal age to sign a mortgage in their state.
There are other requirements for FHA loans, which your mortgage banker at Resource Financial Services will be happy to discuss with you. “When clients qualify for both FHA and conventional loans we discuss their options, presenting the pros and cons of each loan to help them make an informed decision” says Jennifer Bowie, Executive Vice President and Mortgage Banker with Resource Financial Services.
Resource Financial Services is here to make people’s dreams of home ownership a reality. That’s why our experienced mortgage specialists work hard to educate homebuyers about the wide variety of loan programs that can be tailored to meet individual financial needs. We offer quicker closings, same-day pre-approval and guaranteed lower rates.
We’re excited to help you find your home, find your loan and get cash back. Start searching for the home of your dreams online at rfsmortgage.com. Call us today toll-free at 877.797.4545 to speak with one of our mortgage bankers.