Wednesday, May 30, 2012

Benefits of FHA Loans

FHA loan is a mortgage loan provided by private FHA-approved lenders and backed by Federal Housing Administration.
It’s a form of federal assistance which protects both American people with lower incomes who want to buy a house by borrowing money and these private FHA-approved lenders. The policy began in 1930s and has been widely carried on and welcomed by millions of people, especially first-time home buyers.

Why FHA Loans are popular?
Compared with Private Mortgage Insurance (PMI), FHA loan affords several advantages which are also the reasons why so many people choose it.
Competitive interest rates. Compared with other loan types, FHA loan has lower and more competitive interest rates. FHA loan will help cost you less. That’s all because it’s insured by federal government. FHA loans have little or no adjustment of interest rate.

Low down payment. One highlight is that you can pay only as low as 3% of the whole payment. Other standard loans may require higher down payment. Besides, FHA loan allows the payment to come from your family member, friends, boss, charitable organization and other sources as a gift. In some cases, the down payment can be decreased to zero.
There are also protections to avoid foreclosure. FHA loan can offer various options which will help you keep your house and avoid foreclosure while they meet some financial difficulties. 

Basic requirements of FHA loan
FHA loan boasts easy qualification while most of loans usually issue strict qualifications to avoid default loans. If you are late for paying or unable to pay every month, FHA, instead of you, will pay the lender. Most of FHA lenders willingly offer loans with relatively lenient qualification while the federal government provides supports and guarantee. Usually, lenders are likely to offer your loan which can be paid in a relatively long loan term. Even if you have suffered from bankruptcy and foreclosures, you are able to apply for a FHA loan as long as bankruptcy happened two years ago and foreclosure three years ago.

According to the related regulations of FHA loan, there are no income limits for those applicants. If you’re a first-time homebuyer and have unstable and flexible salary, you also have opportunities of applying for FHA loan and getting your own house. You should have a stable job for two years, preferably provided by the same employer. Your income of last two years should be the same or increasing.

If you have less wonderful credit in your personal history, other types of loans, including conventional loan, will not offer your opportunity. If you have credit score of 700 or higher, you’re likely to apply for a conventional loan with only 10% down payment. If your credit score is below 650, you will impossibly succeed in applying for a conventional loan. The minimum credit score of 620 or sometimes zero credit score is needed. FHA loan is the most suitable loan for those who don’t have a perfect credit history. A decent loan is enough for you. Even when you have a financial problem or debt, you will be qualified for FHA loans.

Benefits of FHA Loan
Looking to purchase a new home but don’t have enough money for a down payment? A home loan insured by the  Federal Housing Administration (FHA) could be an ideal solution. The FHA offers a variety of federally backed loan programs to help home ownership available and affordable for first-home buyers and low income families. Even better, FHA loans requirements are not too strict and almost everyone can get such a loan.
Undecided whether to apply for FHA loan? Now, let’s figure out more benefits about these loans to help you make the decision.

Low down payment: According to FHA loan guidelines, the minimum down payment for an FHA loan can be as low as 3.5%, based on the FHA loan type, borrower’s credit, the state where the property is located and other factors.
Flexible credit requirements: Speaking of credit, it is also one factor to consider in FHA loan qualifications. In fact, FHA loans require an easy credit qualifying. Precisely, a credit score of more than 500 can be eligible for an FHA loan. However, if you want to qualify for a 3.5% down payment, you are required to have a credit score of 580 or higher.

A Deep Exploration of FHA Loans
To help those who cannot afford to buy a new house, the Federal Housing Administration provides a kind of federal assistance, namely FHA loans. Due to its special purpose, the FHA loan rates are always much cheaper than commercial loans. But what is an FHA loan? In fact, FHA loans are made through individual FHA-approved lenders, instead of the FHA. This form of mortgage loans features low down payment and low closing cost.
Since an FHA loan just requires a low down payment for the purchase a new home, it’s a terrific choice for most home buyers obviously. But what about a conventional loan VS FHA loan? Is FHA loan still a preferable option? The answer is yes! FHA loans still have several advantages over conventional loans, such as lower down payment and easier credit qualifying.
With so many great benefits, you must want to know how to get an FHA loan. The application process is quite simple. Once you’re sure that you do qualify for any of the FHA loan program, contact potential lenders and submit your application together with needed documents.

FHA Loans Qualifications: FAQs about Income and CreditFHA loans can be one of the easiest types of mortgages to qualify for. Even when you are not eligible for a traditional mortgage, you’re likely to get approved for an FHA loan. In order to be eligible to receive an FHA loan, you have to meet the standards of income and credit. Read more

Detailed Requirements of FHA LoansFHA loan is a mortgage loan provided by private FHA-approved lenders and backed by Federal Housing Administration. It assists American people with lower incomes who want to buy a house in borrowing money from FHA-approved lenders. FHA loans are the easiest type of mortgage loan to apply for and feature easy and lenient qualification. In order to apply for a FHA loan successfully, learning these details requirements is imperative.

Income Qualification
Most recent two years complete tax returns and pay stubs should be included in the employment information. Compared with conventional home loans, the income qualifications are much more flexible. But it’s not simple to decide how much of your total income you can spend on the house you purchase. This also affects whether the loan lenders are willing to approve your application. Before you apply, you should take a consideration about your gross income which is all the money you earn before taxes including overtime, dividends, commissions and any other sources.

As long as you show that you have a steady income for the passing two years, you are likely to succeed. Generally, the housing expense including the mortgage, property taxes, mortgage insurance and hazard insurance is the 29% of our total income. Read more.

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.
First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256

Visit First Capital Online or call: 310-458-0010

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.