What should you know about FHA loans?  A lot of people don’t know the perks of an FHA loan – and for first time homebuyers, when there’s a thousand questions swirling around in your head, we have some answers that could help calm that inner storm.

An FHA loan is very similar to a conventional loan – but because of the way it is backed, it makes it ideal for first time home buyers.  It’s also a great option for young people without established credit history, or anyone whose credit is challenged.  Let us explain:

  • An FHA loan is insured by the Federal Housing Administration. What does that mean for you?  Basically, it means the lender is protected in the case that you’re unable to come through on your payments.  That means that it’s less risky for the lender, should you not have a long credit history.  For you, it means it’s a lot easier to qualify for an FHA loan than a conventional loan, because the insurance is guaranteed throughout the lifetime of the loan.
  • FHA usually requires a 3.5% down payment. Conventional loans usually require 5% down.  This can help you out when it comes to closing costs and still having reserves for the first few months in your new home.
  • More qualified buyers, same process. You get the exact same treatment under an FHA loan as a conventional loan – the only thing that’s handled differently is the insurance behind it.  You’ll still have to show you can make payments, and you’ll still get a great loan.  What we love about an FHA loan is that it makes it possible for more people to start out easily and find the home their family has been dreaming about.

If you’ve been looking to buy a home but your credit or your available funds have been giving you qualms, an FHA loan might be the right option for you.  Feel free to call us with any questions you might have!  We’re a Christian Mortgage team that values faith and family – just like you.  We can’t wait to hear from you.

 

Best,

Audrey

The Christian Mortgage Mom

Audrey