The housing market has seen some serious ups and downs in the last few years. It can look good or bad for anyone at any given time, but sometimes it doesn’t matter – you need a house! If you are in the market for a new home, then the timing might not be something you can choose. However, you are still in control of a lot of decisions! You get to decide what type of home you need, how big or small, the major features, city and neighborhood, and how you want to finance your home. People are buying homes earlier now than ever before, and the financial market is responding.
The government created FHA loans (Federal Housing Administration) to help stimulate lenders to give loans to more prospective homeowners, even if their credit wasn’t perfect or they didn’t have a great down payment. The idea was that the FHA would back up these loans so that lenders would approve more loans, meaning more people would become homeowners to boost the economy and housing market. FHA loans have become very popular, especially among young and first time home buyers.
Why should you consider an FHA loan? Well, because they’re some of the easiest and most successful types of loans, especially if you’re new to the home-owning game! FHA loans are typically pretty easy to get, because they are backed by the federal government. Even if you have a really low down payment you can qualify. Most loans and home purchases need around 20% of the asking price for a down payment, but young people and families don’t always have that down payment ready. FHA loans can be acquired with only 3.5% of the asking price as a down payment. Additionally, if you’ve ever declared bankruptcy or you have less-than-perfect credit you may still be able to qualify for an FHA loan. This really helps people who have had a rough financial past but are looking to improve their future. The last really great thing about an FHA loan is that the loan is potentially “assumable,” so if you want to sell your house before the loan is complete the loan can be assumed with the price of the house.
The only stipulations with FHA loans is that the house has to be appraised and approved by the FHA, to ensure that the house’s worth is accurate, and that there are some premiums added into the price of the house and the monthly mortgage payment. These steps are to protect the lender, but can be easily financed and factored into your regular payments. They can seem expensive, but considering that this loan allows you into a house you wouldn’t otherwise qualify for – it’s actually a pretty reasonable deal.
How do you get an FHA loan? Speak with your realtor, bank and a preferred loan officer. There are a few qualifying steps you’ll need to take just to ensure that an FHA loan is right for you. FHA Loan Group can also help get you qualified and you can also get a free custom rate quote. Once you have proven that you qualify for this type of loan you can begin paperwork and applications which will allow you to buy the home of your dreams, even if you have a low down payment or bad credit. FHA loans might be a great option for you, so do your research and ask a loan officer today!