FHA Loans Could Help Protect Your Home Purchase
Buying a home is one of the largest financial decisions a person can make. The process of looking for the perfect home, saving up for a down payment, and finding the right lender who can give you the best interest rate takes a huge amount of time and discipline to make sure that you are getting the home you want at a price that you can afford.
One of the hardest things a person can endure is losing their home, which is happening more and more in this economy. Why are so many people losing their homes? And is there a way that this could be avoided? Sometimes it is impossible to avoid foreclosure and losing your home, but there are some ways that this might be avoided. One of the best ways to save money on your home loan and purchase a home within your price range is with an FHA Home Loan.
FHA home loans are loans that were designed to help first time homebuyers get into their homes more easily. These loans are insured by the Federal Housing Administration, which means that homebuyers don’t need to purchase separate private mortgage insurance. This saves the buyer money and time and allows them to focus on finding the perfect home as opposed to spending time finding an insurance provider who can offer them a great price.
There are a few FHA loan guidelines that need to be met, but the application process, approval process, and administrative hassles for FHA loans are all minimal and streamlined. Additionally, there is little money required up front for a down payment; sometimes as little as 3.5% of the purchase price is required. This is a huge amount less than the standard 10-20% that is typically required with a traditional mortgage.
In addition to the low down payments and included mortgage insurance, FHA home loans are great because they don’t require that the home buyer pay any of the closing fees up front. These fees are added into the price of the loan and can be paid off over the term of the loan. Closing fees can add up to almost 6% of the total price of the home, so being able to pay these off over time can be a huge financial relief for homebuyers who haven’t been able to save enough to cover closing fees. In addition to all of this, FHA loan amounts can be increased so that more than the price of the home can be financed, giving the buyers additional money that can be used towards home improvements or making your home more energy efficient, as well as making it easier to acquire payday loans when needed.
If you are considering purchasing a home, an FHA loan should be the first thing you consider. It is important to get qualified for financing before you start shopping for a home so that you know what your budget is and what kind of home you can afford. You don’t want to fall in love with something you can’t have, and it’s crucial that you maintain realistic expectations for your new home. Speak with a qualified lender and find out what kind of home you can purchase.