Buying a home for the first time can be extremely exciting, but that doesn’t mean other emotions don’t come along with that excitement. The journey to buying a new home can come with lots of ups and downs, but we want to be the team to help you make the best decisions for you along this journey.
Many first time home buyers have heard of an FHA loan but they may not know what it takes to qualify for one or even where to get started. An FHA loan is secured by the Federal Housing Administration and is a great way for first time home buyers to secure financing to purchase a home. FHA loans are especially good if you have less than perfect credit or lack a large down payment.
FHA loans are accessible to a wide range of people and are backed by the government so they aren’t as risky as other types of financing. FHA loans are a good route to consider because if you decide you would like to sell your home, it is an assumable mortgage, which means the loan can be transferred to the new buyer.
First Things First
The first thing you’ll do is prepare and review your finances. Your credit score is very important when discussing finances with a lender so you want to do whatever you can to make sure it’s at the highest it can possibly be, but it needs to be over 580 for an FHA loan. You’ll also need a down payment but it’s only 3.5 percent which is a lot less than you would need for other mortgages.
These are the two most important requirements that are needed to qualify for an FHA loan but there are others listed below:
-Social security number
-FHA loan must be used for a primary residence
-Front and back end ratios must fall under specific percentages
-No recent foreclosures or bankruptcy
Things To Consider
An FHA loan is fairly easy to qualify for, especially in comparison to a conventional loan so that means there are some stipulations that must be met on the back end. You must have mortgage insurance if you want to secure an FHA loan. The first type of insurance premium is paid in full and the other is a monthly payment.
Another thing to consider is that the FHA has limits when it comes to the amount that can be financing which varies by area so it’s important to verify the limits for your particular area to confirm it’s going to work with your housing needs. Not all lenders have the ability to finance an FHA loan so that is also something you’ll want to discuss with your lender directly when getting quote information.
Reach Out Today!
We know that purchasing a home comes with a lot of questions and concerns, but our team is going to help you take each step as it comes to get you into your dream home. The team at KC Investor Funding is here to help you from the first step to the last so don’t wait, reach out today!