Don’t think you can ever qualify for a home loan? Think again. The FHA or Federal Housing Administration can give you a fair shot of qualifying for a home loan. To begin, here are eight things you need to know according to Direct Mortgage Loans:
1. Qualifying is Much Easier with an FHA Loan
If you have a poor credit history, even filed for bankruptcy, you can still qualify for an FHA home loan as long as your current score is no less than 500.
2. Down Payments are Lower with FHA Loans
Traditional lenders normally require you to pay at least 20% down payment, while FHA approved lenders may require lower down payments as low as 3.5%.
3. Interest Rates are Lower with FHA Loans.
Because the FHA is not the one who determines loan interest rates and deliver financing, you can negotiate your way to lower interest rates with the FHA approved lender.
4. You Can Prevent Foreclosure with FHA Loans
FHA loans can be used with the MHA or Making Home Affordable program by the federal government to aid borrowers who don’t have the necessary funds to take out a loan.
5. You Can Use a Federal Housing Administration Loan for Making Repairs or Home Improvements
You can choose to use an FHA home loan or refinance for repairing crucial elements in your home or making upgrades, such as to make your home more energy efficient.
6. Disaster Survivors can use FHA Loans to Help them Get Back on their Feet.
The FHA can provide full financing via FHA approved lenders for disaster survivors who would like to buy a new home or rebuild their heavily damaged homes as a result of a disaster.
7. Closing Costs are Lower with FHA Loans
Even if the FHA itself does not determine or regulate fees, closing costs of FHA loans are normally lower than closing costs associated with traditional home loans.
8. Senior Citizens can use FHA Loans for Additional Income.
If you are 62 years old or older and need extra spending funds, you can qualify for the Home Equity Conversion Mortgage Program by the FHA.
Note, however, that not all FHA home loans are the same since it is the lenders who are responsible for determining rates, fees, and specific guidelines.