Many times I am asked why is a FHA mortgage better than conventional? In fact, there are many advantages to FHA financing.
FHA insures the mortgage which reduces the risk a lender has to assume in the event a borrower defaults on the mortgage payments. Insurance allows lenders a little more willingness to loan to those with not so perfect or less depth in their credit history. This helps individuals qualify for financing.
FHA's underwriting standards are less strict than those of conventional loans. This allows individuals who have had credit issues, bankruptcy, foreclosure or inconsistent payment records the opportunity to qualify for financing.
Also, FHA will allow a minimum down payment to be as low as 3.5%. These funds can come from the borrower, co-borrower, or in the form of gift funds. Gift funds may be given from a parent, grandparent, fiance', sibling or god-parent.
In today's market if you are purchasing a home below $271,000.00 and putting less than a 20% down-payment, it may be in your best interest to have a FHA loan. Rates are low and FHA may be assumed if qualified and monthly mortgage insurance is generally much lower on an FHA mortgage.
If you have questions or would like to be pre-approved to purchase a new home or refinance your existing, please visit my website www.vshomeloans.com or call me at 205-995-7283 x 304. I would love to help with one of the largest financial decisions you will ever make.
Yours to Count On,
Valerie Springer NMLS 198479