subject: Taking Advantage Of Fha Loans [print this page] Are you looking for possible ways you can get financial assistance so you can by your own Irvine Real Estate property? For sure, you will not forget to shop around for loans offered by banks, mortgage companies, credit unions and government sectors. Before or once you are done looking for and visiting Irvine Homes for Sale, the next step you can do is to look for loan programs suitable for you that can greatly help you with financing your future house. Do not forget to shop for mortgage programs offered by government institutions like the Federal Housing Administration. FHA offers several loan programs created for various types of borrowers like the first time homebuyers and the senior citizens.
What is an FHA loan?
It is basically a mortgage that is insured by the Federal Housing Administration, wherein any lender qualified by the government are allowed to issue this kind of loan. FHA started this program by giving assistance to low-income earners and to those who are experiencing difficulties when qualifying for a loan program. Take note that FHA does not really lend money to borrowers. They are not the ones setting interest rate for the FHA loan you are getting. They are only the insurer, so they can protect and secure the lenders against the defaults. Because of this, they can offer low interest rates to interested borrowers.
Advantages of getting FHA loan
One of the advantage that you can get from it is that you are sure that the government is the one insuring it, making the credit loans to have easier qualification guidelines than other private loan programs. The closing costs for the loan are also much lower and sometimes, you can tie it up to the amount of the FHA loan. The down payment can also be as low as 3.5 percent if you will use this kind of loan.
Requirements
If you are going to pursue applying for an FHA loan, make sure you have a desirable credit score because it is one of the major requirement for this mortgage program. You should have at least 580 credit score or higher so you can be qualified for the maximum financing of the loan or even a 3.5 down payment. If your score only reaches 500-579, the loan will be limited to 90% loan-to-value. This only means that you should prepare a 10 % down payment. If you have a credit score below 500, unfortunately, you are not eligible for a loan program provided by FHA. You should take note that even though they provide more chance to borrowers, there are still qualification requirements that should be fulfilled before you can fully take advantage of their programs.
Nonetheless, before you settle for a loan from FHA, make sure that you find time looking for conventional offers from private lending companies. There are times that you might find traditional private loans more favorable for you when you compare it to FHA loans. Take time shopping for the best loan deal you can get, be it from the private or the government sector.
by: Christopher Minahan
Zaproxy alias impedit expedita quisquam pariatur exercitationem. Nemo rerum eveniet dolores rem quia dignissimos.
