The Best Opportunities For FHA Loans

Very few people in today’s day and age are able to purchase a home outright without the need to get a loan. When in search of finding assistance in purchasing a loan, most people opt to delve into the world of FHA (Federal Housing Administration) Loans.

This piece will speak about what exactly an FHA loan is — as well as the parameters in qualifying for one. Not only do millions of people annually apply for these loans, but roughly 20,000 people are reportedly said to exercise this option on a weekly basis.

Some Additional Information

The FHA loan is often most attractive to a first-time home buyer. There’s always the ambiguity surrounding one’s credit score, and what that means in regards to securing the loan. For younger people there’s a chance they’ve not yet built up credit in a productive way. For some, they’re slammed with debt (credit cards, school tuition, car payments). You may think a poor score wouldn’t lead to a loan opportunity.

However, that’s not necessarily the case. According to various reports, people with credit scores starting at 500 can get a loan (assuming the down payment is 10-percent). Of course, people with higher credit scores are entitled to pay less than that. It all depends upon one’s credit scores. Once that is figured out, financing can be spoken about with professionals in the field. According to most reports, there are loan/financing experts based in all 50 states. In addition, to qualify for the loans on a base level, the person must show steady employment (along with a debt-to-income ratio reportedly below 43-percent).

Types of Loans

There are four primary FHA loans worth recognizing. They include: Graduate Payment Mortgage, Reverse Mortgage, Fixed-Rate FHA, and Adjustable-Rate FHA.

As illustrated in the title, the fixed-rate loan involves a fixed monthly payment for which the home owner must meet. It also includes a set duration from which the loan must be paid back. The Adjustable-Rate loan is just that — alterations can be made after a few years. There are times when the monthly payments can drop, and others where they’ll increase.

The Graduate Payment Mortgage take out a mortgage in association with one’s annual salary. If one believes that the salary will increase over time, monthly payments can increase with a single-family mortgage (from which there are multiple plans to choose from). Lastly, the Reverse Mortgage is aimed at those who are older than age 60. Equity is used from your preexisting home, and is then used to make payments on another home.

As is the case with all major transactions, do your due diligence before committing to something long term. By doing the research, you’ll better educate yourself on something which can be a life-changing event.