The Benefits Of Taking Out An FHA Loans When Buying A Home
FHA loans, which are loans that are guaranteed by the Federal Housing Administration, are an incredibly popular option for first-time homebuyers. Their popularity stems largely from the fact that they offer a number of benefits over traditional loans.
Here are some of the primary benefits that you can enjoy if you go with one of these loans:
1. Low down payment requirements. Most traditional loans require you to put 20% down on a home. Trying to save that much money can be incredibly difficult if you are on a relatively tight budget. FHA mortgages, on the other hand, require that homebuyers only put 3.5% down on the home. This is a much more reasonable amount for most people to save, making it possible to qualify for a loan even if you don’t have a huge down payment.
2. Lenient credit requirements. Generally, the credit requirements for an FHA home loan are much more lenient than those that are required for a traditional loan. Conventional lenders usually require borrowers to have extremely good credit. On the other hand, people can generally get approved for a loan even if their credit has significant problems when they choose an FHA home loan.
3. Closing costs can be bundled into the loan. Closing costs are another stumbling block that people often run into when trying to buy a home. Depending on the value of the home, the closing costs can often require thousands of dollars extra at the time of the purchase. FHA home loans, and the other hand, often allow the closing costs to be rolled into the loan itself, minimizing the amount of money that people have to have on hand to buy a home.
With so many benefits, FHA loans make a lot of sense for first-time homebuyers.