Preparing For a Down Payment: Year-End Savings Strategies
As the year comes to an end, you may be beginning to think ...
The thought of owning a home is exhilarating. We’ve all heard about how it’s a good investment, how it builds equity, and how it’s more affordable than renting. But there’s more to it than that. There’s a sense of pride that comes with being a homeowner and in creating a place where you and your family can grow, create memories, and become part of a community.
For many young or first-time homebuyers, it can be difficult to save up for a large down payment or improve their credit score. If that sounds like you, then an FHA home loan might be the perfect option.
What are FHA Home Loans?
In 1934, the U.S. government signed the National Housing Act to standardize residential housing construction and mortgage loan underwriting, and stimulate the struggling housing market. It also created the Federal Housing Administration (FHA) to oversee the home financing and insurance industries.
The goal was to make it possible for more citizens to afford down payments and qualify for affordable loans. The program also gave lenders more confidence because each loan was insured by the government in the event that a homebuyer defaulted on the loan.
Today, FHA home loans offer the most flexibility for homebuyers who can’t make a large down payment or don’t have perfect credit.
Low Down Payment Requirement
FHA home loans allow you to put as little as 3.5% down, which means you don’t have to worry about paying a fortune in upfront costs.
Flexible Credit Qualifications
Even if you have less-than-perfect credit or a complicated credit history, you can still qualify for an FHA home loan. Your family and friends can even help you qualify with gift funds.
A Mortgage That Works For You
FHA home loans give you the ability to create a mortgage that fits your needs and your life. Choose between a fixed- or adjustable-rate and a variety of loan term lengths.
FHA Home Loan Overview:
- Minimum 3.5 percent down payment required.
- Entire down payment can come from gift funds provided by family members.
- Seller is allowed to provide up to 6 percent of the purchase price to pay for closing costs.
- Perfect credit not required to qualify.
- Fixed- and adjustable-rate options available.
- Non-occupying borrowers can help qualify for the loan.
