There are more than 5 reasons for an FHA loan on Tooele homes, but If you are serious about getting in to that new home NOW I thought I would bring you the most obvious.
Plus I hope the most helpful.
In short they would be the five problems getting a loan from the Federal Housing Authority could solve.
- Not enough income to qualify
- Not enough saved for a down payment
- Need higher loan to value ratio (LTV)
- Credit score limitations
- Regulations that apply to closing costs
And as a bonus, I’ll throw in a sentence or two about the security of a FHA mortgage and then finally I have included some snippets to articles I have found that comment about differing features of these loans.
Hope these help.
To Get Approved Because of Your Income?
Buying a home isn’t cheap. But if you’re determined to become a homeowner, the FHA home loan program can help. This loan program, ideal for first-time buyers with low incomes, can help you to build your credit and make home ownership a reality.
So why should you consider an FHA loan? Here are just a few ways you’ll benefit from these government-backed mortgages.
You Can Get Approved With Just 3.5% Down
Traditional mortgage lenders typically require you to pay 20% down on your mortgage, or 5% if you have good credit and agree to pay mortgage insurance premiums. But for a lot of younger people with lots of debt and low incomes, even a 5% down payment is an unrealistic burden. With an FHA loan, you can be approved for a mortgage with a down payment as low as 3.5% – which means a $200,000 home can be yours for as little as $7,000 down.
You Can Get A Loan With A Very High L to V Ratio
Standard mortgages are difficult to get if you have a high debt-to-income ratio. Typically, lenders will want to see that your mortgage costs will consume no more than 28% of your income, and your total payments toward debts from all sources will be no more than 36% of your income. But with an FHA loan, you can get a mortgage with a 29/41 ratio.
You Can Qualify With A Low Credit Score
If you have a credit score under 700, you’ll pay higher interest rates on typical mortgages – and if it’s below 660, you may not get approved at all. But with an FHA mortgage, you can get approved for a 3.5% down payment with a credit score as low as 580 – or lower, if you agree to a 10% down payment.
FHA Closing Cost Regulations Are Better For Low-Income Buyers
FHA loans have different closing cost regulations than traditional mortgages. With an FHA loan, you can bundle closing costs into the mortgage or even use gift funds for 100% of the closing costs. That means home ownership is more accessible for people with lower incomes.
An FHA Loan Can Help You Find A Good Home
With most mortgages, you’re free to buy any home you wish as long as you stay within a set price range. But with an FHA loan, any home you buy must be habitable, sanitary, and safe – otherwise the FHA won’t approve your loan. That means using an FHA loan will ensure you get a good home.
What Others Think About FHA Mortgages
Because of low down-payment requirements and relaxed lending standards, FHA loans are onthe radar of today’s mortgage borrowers. Here are seven facts …
So there you have it. Just a little practical advise that should help you evaluate any loan products available for your search for that new Tooele home.
Don’t forget where you got it. This is part of my resume; to let you know I know about real estate in Tooele County and that I will be a good partner to help you find the perfect property.
When you are ready, call me, Berna Sloan 435-840-5029 we can talk about real estate or more about the 5 reasons for an FHA loan on Tooele homes.