Why an FHA Financing is a Great Option
Even though today's mortgage rates continue to be low, there are many buyers not able to qualify for home loans. Past credit histories, student loans, and other issues pose roadblocks that are difficult to overcome. However, one option buyers can use to finance a home is an FHA loan. If you've been told you don't qualify for a conventional loan, it may be time to carefully explore the many advantages of an FHA 203(b) loan.
Credit Scores, Down Payments, and Qualifying for a Mortgage in Today's Market
Conventional mortgages typically require at least a 20 percent down payment. For most buyers today, that's simply not possible. On a $180,000 home, a twenty percent down payment would equal $36,000. That's a lot of money when student loan payments and other recurring expenses prevent saving large sums of money. On the other hand, a first time home buyer may well qualify for an FHA loan with as little as a 3.5 percent down payment, which would amount to roughly $6,300. That's a figure many people, hopefully including you, can work with to purchase that ideal home. …show more content…
In many cases, obtaining a conventional mortgage can require a minimum credit score of 640. Given the financial issues people faced during the recent recession, many people don't have scores of 640 or higher. The minimum requirement for FHA home loans offering that 3.5 percent down payment is only 580. That's a requirement far more people can meet. In addition, those with scores over 500 can often obtain the financing they need with a 10 percent down payment. That's why you may want to consider an FHA loan
Even though today's mortgage rates continue to be low, there are many buyers not able to qualify for home loans. Past credit histories, student loans, and other issues pose roadblocks that are difficult to overcome. However, one option buyers can use to finance a home is an FHA loan. If you've been told you don't qualify for a conventional loan, it may be time to carefully explore the many advantages of an FHA 203(b) loan.
Credit Scores, Down Payments, and Qualifying for a Mortgage in Today's Market
Conventional mortgages typically require at least a 20 percent down payment. For most buyers today, that's simply not possible. On a $180,000 home, a twenty percent down payment would equal $36,000. That's a lot of money when student loan payments and other recurring expenses prevent saving large sums of money. On the other hand, a first time home buyer may well qualify for an FHA loan with as little as a 3.5 percent down payment, which would amount to roughly $6,300. That's a figure many people, hopefully including you, can work with to purchase that ideal home. …show more content…
In many cases, obtaining a conventional mortgage can require a minimum credit score of 640. Given the financial issues people faced during the recent recession, many people don't have scores of 640 or higher. The minimum requirement for FHA home loans offering that 3.5 percent down payment is only 580. That's a requirement far more people can meet. In addition, those with scores over 500 can often obtain the financing they need with a 10 percent down payment. That's why you may want to consider an FHA loan