FHA loans provide great assistance for those looking for mortgage loans with lower down payment requirements if you are a first-time homeowner. This is a massive benefit for most people, as the current state of our economy has left many people struggling. Before you apply for your FHA loan, you need to understand whether you qualify. Let’s take a closer look at the benefits of FHA and loans and what you need to qualify.
Benefits of FHA Loans
There are several veterans to FHA loans.
- Since most traditional loans simply exclude applicants with low credit scores, the FHA makes loans available to these applicants with lower requirements. This makes it easier for you to qualify if you don’t meet the strict requirements of traditional loans.
- Unlike other loans, the FHA loan has lower fees all around. This includes lower closing costs, mortgage insurance, financing rates, and down payments.
- The best thing about FHA loan is that it provides lower interest rates to homeowners to afford housing payments comfortably and their income is not significantly impacted.
Requirements to Qualify
Applicants interested in an FHA loan are required to have a minimum FICO score of 580 to qualify. The down payment cost for a rate of 580 or above is 3.5%.
The FHA loan program has introduced some new policies working well in helping people get loans. The new guidelines have helped almost 100,000 families with lower credit to qualify for a loan. As the FHA loans have become more flexible over the past years, many people have refinanced with an FHA loan.
Qualifying With Lower Credit Score
Even if your credit score is lower than 580, you can qualify for the FHA. Just keep in mind that a lower credit score means you will be required to leave a high down payment and possibly pay higher interest rates. If your FICO score is lower than 580, then you are not excluded from the eligibility list. Still, you are obligated to give a 10% down payment.
If you are a homeowner and you are about to take the FHA, you might want to take some time to build your credit first. The minimum score to qualify for FA loans is 500, and no one can be eligible below this score.
Before you apply for an FHA loan, it’s best to talk to a financial advisor to discuss your options. While FHA loans are an excellent option for those with credit score issues, a professional advisor can help determine if it’s the right option for you. They can also ensure that you get the best rates possible.
Contact All American Financial Services Today to Discuss Your Options
If you are considering refinancing in Lancaster, we’re here to help. Contact All American Financial Services to discuss your options today!