FHA loans are an attractive option, especially for first-time homeowners because it is insured by the Federal Housing Administration (FHA). Primarily, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments.Typically the borrower can be approved with 3.5% down vs 20% that is required on other loan programs.
Where Conventional loans require a higher credit score and more money down, FHA loans not only have the 3.5% minimum down payment requirement, gift funds, a gift of equity, lower credit score, and lesser income situations are okay with FHA financing options. Adding co-borrowers to the process is easier with FHA financing as well.
FHA interest rates are typically lower than Conventional loan rates. In other words, in difficult situations where customers and borrowers have difficulty qualifying for a loan or refinance, using the FHA loan program can be a lifesaver. Additionally once in a FHA loan, depending on the equity position, a borrower can transition out of the FHA loan program in as little as 6 months. While in FHA financing the FHA streamline refinancing program is a great tool to keep your interest rate low at all time for no cost. And getting cash out using FHA financing is far less hassle based on the government lending guidelines.
Allow me to show you all of the useful benefits of FHA loan financing and save time and money.