Taking the first step on the journey to purchase a new home can come in many forms. Whether it’s sending a request for more information on Zillow or setting up an interview with a local realtor, it’s the beginning of a significant journey and we want to be there to support you along the way.
The excitement of looking at homes can sometimes overpower the reality of what it actually takes to buy that home. One of the best things new homebuyers can do is to start their search by researching financing. There are several types of loans and lenders available, so finding the best one for your financial situation is going to save you a lot of hassle and money in the long run.
Many first time home buyers have heard of an FHA loan but they may not know what it takes to qualify for one or even where to get started. An FHA loan is secured by the Federal Housing Administration and is a great way for first time home buyers to secure financing to purchase a home. FHA loans are especially good if you have less than perfect credit or lack a large down payment.
FHA loans are accessible to a wide range of people and are backed by the government so they aren’t as risky as other types of financing. FHA loans are a good route to consider because if you decide you would like to sell your home, it is an assumable mortgage, which means the loan can be transferred to the new buyer.
How Do I Get One?
The first thing you’ll do is prepare and review your finances. Your credit score is very important when discussing finances with a lender so you want to do whatever you can to make sure it’s at the highest it can possibly be, but it needs to be over 580 for an FHA loan. You’ll also need a down payment but it’s only 3.5 percent which is a lot less than you would need for other mortgages.
These are the two most important requirements that are needed to qualify for an FHA loan but there are others listed below:
-Social security number
-FHA loan must be used for a primary residence
-Front and back end ratios must fall under specific percentages
-No recent foreclosures or bankruptcy
Things To Consider
An FHA loan is fairly easy to qualify for, especially in comparison to a conventional loan so that means there are some stipulations that must be met on the back end. You must have mortgage insurance if you want to secure an FHA loan. The first type of insurance premium is paid in full and the other is a monthly payment.
Another thing to consider is that the FHA has limits when it comes to the amount that can be financing which varies by area so it’s important to verify the limits for your particular area to confirm it’s going to work with your housing needs. Not all lenders have the ability to finance an FHA loan so that is also something you’ll want to discuss with your lender directly when getting quote information.
Call Us Today
We know that purchasing a home comes with lots of ups and downs but the process itself can be truly rewarding and very educational as well. AmeriSouth Mortgage in Charlotte, NC we have resources to help you from the first step to the last so don’t wait, call today!
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.