- Many Americans dream of owning a home and must consider how to qualify for loans and save for down payments. FHA Insured Loans (also known as FHA loans) have helped many people realize this dream. The Federal Housing Administration (FHA) insures these types of loans. Many FHA loans come with low down payment options and have less stringent credit score requirements than other types of mortgages. Find your first FHA insured loan with Trinity Mortgage and reap the benefits of this wonderful program in San Antonio, TX.
The Basics and Benefits of an FHA Loan
FHA loans are part of an important government program since they provide security for lenders if a borrower fails to pay off the loan. FHA loans are a great option for first-time homebuyers since they usually only require 3.5% of the home purchase price as a down payment. A credit score of 580 or higher is required to quality for 3.5% down, however you may still be able to be approved with a score between 500 and 579. If your score is in this range, you will need to make a higher down payment of 10%. With an FHA loan, family members are able to gift the down payment if the borrower does not have the cash available themselves. Many homebuyers can obtain low monthly payments with this program. It is important to have any student loan or income tax payments current when you qualify.
Securing an FHA loan requires an inspection of the home you plan to purchase. An FHA loan is not a conventional loan; it is “nonconventional” because it is insured by a government agency. FHA loans were a government program created during the Great Depression to help make it possible for struggling residents to purchase a home.
FHA loans require purchase of mortgage insurance: This is required no matter the size of your down payment. Mortgage insurance is premium paid to protect the lender if you default. It is not there to protect your home if it is damaged. For this reason, you will need to buy home insurance, as well.
Are You Buying a Home in Need of Many Repairs?
Many buyers are purchasing older homes that will need major to minor repairs. Borrowers may obtain an FHA 203(k) Loan for repair costs. Some of the types of repairs covered under this program are:
- Repairing bathrooms
- Improving or replacing floors
- Replacing and upgrading plumbing
- Mounting add-ons like decks and patios
- Installing air conditioning or heating systems
You must get a precise estimate of repairs needed to determine if you qualify. Your total loan may end up being based on the increased value of your home after repairs are completed.
Purchase your First FHA Financed Home Today
Trinity Mortgage Inc. has helped many home buyers find a great place in Texas with an FHA loan. Our staff are experienced and here to help you meet your goals. Contact our San Antonio Texas team today.