If you are in the market to purchase a home, you have probably done your research regarding the financing of your new home. One way to finance the purchase of a home is with an FHA loan that can be secured by the Federal Housing Administration.
FHA loans are a great way for first time home buyers to secure financing to purchase a home especially if they 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.
Another reason FHA loans are a good route to consider is that if you decide you would like to sell your home, it is an assumable mortgage, which means the mortgage can be transferred to the new buyer.
How Do I Qualify?
The first thing you want to 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 that should be evaluated when considering choosing this type of loan. These include:
-Social security number
-FHA loan must be used for a primary residence
-Front end and back end ratios must fall under specific percentages
-No recent foreclosures or bankruptcy
This a solid list of qualifications that need to be met for an FHA loan to be approved but there are always exceptions to the rule so if you think you might not qualify for one reason or another, don’t be discouraged to discuss your options with Bill Lavelle.
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 up front and other is a monthly payment.
Call Us Today
We know that purchasing a home comes with many choices and lots of ups and downs but the process itself can be truly rewarding and very educational as well. At First Financial Bank in Worthington, Ohio, we want to make sure we are here for you from the first step to the last, so don’t hesitate to reach out today.