The FHA home loan is the most common mortgage loan product insured by the FHA that allows homebuyers and renters who lacks of perfect credits and have not been able to save big downpayment, their best shot.
FHA homebuyers are not people with truly bad credit — they’re just borrowers who don’t check all the boxes for a conventional (non-government) lender — high credit score, big downpayment, lots of money in the bank and a well-paying job.
If you are not perfect but wants to be a homeowner, FHA home loans may be the best step you can take.
Here are the some of the journeys of people who wants to have their own dream house, and fulfilled that dream with an FHA mortgage.
Newlywed FHA Homebuyer Beats Cash Offers
A young couple who wanted to buy their first house, had just paid for a wedding and are left with $3,000 for a downpayment for the property.
The couple’s bid kept getting passed over for cash offer, but their realtor told them with their FHA loan, it might make them less competitive buyer.
Grandmother Gets Updated Condo With FHA Loan
Realtor Michael Kelczewski was showing town homes on a Sunday afternoon in Newark, Dela. Most of his clients are Millennials who chooses FHA loan products, because they usually are first-time homebuyers with high debt loads and perhaps limited credit histories,
But his clientele this time is a grandmother, who was searching for a home to buy. She does not fall into the first-time homebuyer age demographic. She was widowed, currently renting, and is now seeking homeownership.
Given the woman’s limitations, FHA mortgages were the only available products for her attempt at homeownership.
FHA Loan Helps With A Past Foreclosure
There is a misunderstanding that FHA loans are only for first-time homebuyers, says Jeremy Schachter, a mortgage advisor in Phoenix.
Schachter had a client who had history of foreclosure from the downturn in the Arizona market, close on a FHA loan. The foreclosure was his only derogatory on his credit report, and he ended up buying a single historic family home in downtown Phoenix.
“He puts the minimum 3.5 percent down, and his payment was actually lower than his current rent,” Schachter says.
FHA guidelines are more forgiving for events like foreclosure, allowing three years with a 3.5 percent down payment.
What Are Today’s Mortgage Rates?
Today’s FHA mortgage rates are generally a little lower than the non-government loans, but you also have to keep in mind that FHA homebuyers must pay mortgage insurance premium, which can be more expensive than private mortgage insurance. Check with a lender now to see which program fits best for you.