You’re buying a new home and you’re in need a mortgage lender. However, there are so many different mortgage lender options. How do you know which one to choose? One of the most popular options is called a FHA Home Loan. FHA stands for Federal Housing Administration. This is an agency run by the government, but unlike other government agencies, FHA funds itself without using American’s tax dollars. A good way to look at this loan is that it insures lenders in case the borrower (homeowner) can not longer pay their payments. There are multiple reasons why this option is widely used. Here are a few:
LOWER DOWN PAYMENTS & LOWER CREDIT SCORE
This is generally a great option for many homeowners because of the way the down payments are usually lower, and the credit score qualifying rate is also lower, making this a fabulous option for many. According to HUD, or U.S. Department of Housing and Urban Development, an individual could be accepted with at least a credit score of 580, and the down payment, also less, is only 3.5% as opposed to other loans that require 20%. That’s a significant difference. Also, mortgage rates are generally lower as well.
Closing costs can sometimes cost a pretty penny, but thankfully a FHA home loan makes sellers contribute to closing costs, paying up to 6% of the loan. This then covers the buyers closing cost, whereas in other loan options, they can usually only pay up to 3%.
KEEPING MORTGAGE RATES
As interest rates continue to rise, this may be one of the best benefits to using a FHA home loan. Essentially, this loan allows buyers to simply take over a sellers existing loan, as opposed to getting a completely new mortgage, which may be higher due to the ever-changing rates. This can be complicated occasionally to be sure that everyone involved has the right credentials, but it is certainly possible.
At Ace Mortgage Loan Corp., we understand how confusing it can be when getting a mortgage loan, between the unlimited options and the uncertainty surrounding which option makes the most sense for you. Our lenders understand these concerns, and work with you to come up with a mortgage plan that leaves you comfortable in the choice you’d made. Mortgages stick around for a while, so making sure that you feel good about your payments is important. If you think that a FHA home loan in Boca Raton may be the best fit, call our lenders today. Your new home awaits!