An FHA Mortgage Loan may get you into a home with a low down payment. An FHA loan provides government-insured loan with flexible loan options. One of the biggest hurdles that first time homebuyers face is saving up for a sizable down payment on a home. Even experienced homeowners may need to plan for a long time for a new home purchase. Fortunately, FHA loans may help some buyers get into the home of their dreams with a lower down payment.
What is an FHA Mortgage Loan?
FHA Mortgage Loans are mortgages backed by the U.S. Federal Housing Administration. FHA loans provide funding for home purchases while requiring a lower down payment. You may get into a new home with as little as 3.5% down.
FHA does not actually lend the money to you directly. They only guaranty the loan so that if you should default on the loan, then FHA will pay the lender a percentage of the loan balance. As a result the word GUARANTY does not actually guarantee the veteran will qualify for a VA home loan.
What is required?
The information that you will need to supply is: employment history, appraisal, debt-to-income ration. A few additional stipulations are also attached to the FHA loan process. Buyers may have to bring 3.5% of the purchase price as a down payment, more if they have a credit score below 640. FHA loans are only available for the borrower’s primary residence.
Credit requirements may also be lower for FHA loans, given other factors demonstrate that the borrower is able to manage their money responsibly. We are often able to work with buyers with a lower credit score or shorter credit history than in other situations.
How FHA Mortgage Loans Work
- Purchase your home with as little as 3.5% down payment (compared to 20% required on most loans).
- 30-, 25-, 20- and 15-year terms are all available with fixed rates.
- 5-year adjustable rate mortgage available.
- Pay your mortgage off at any time without pre-payment penalties.
Have questions? Give us a call! One of our mortgage specialists would be happy to answer all of your questions.
**South State Bank is not affiliated with or acting on behalf of or at the direction of FHA, VA, USDA or the Federal Government.