Are you ready to buy your first house but don’t feel like you have enough of a down payment? Not a problem. Thanks to FHA Loan programs you can put as little as 3.5% down. Compared to the traditional 20% down on a conventional loan, with only 3.5% down it helps many people like yourself get into their dream home. The slow growth of the economy and low inventory in the housing market has helped with keeping interest rates very low for many new homeowners. Low rates and low down payments are very advantageous to the new homebuyer.
An FHA Loan, although requiring a low down payment, does have more strict guidelines and standards than a conventional loan product. Borrowrs will pay a higher PMI rate of 1.75% upfront and 1.35% annually on their FHA Loan. Because FHA Loans are backed by the government they will also be held to strict underwriting guidelines throughout the process in order to ensure the loan will not default. The property must meet certain guidelines during the appraisal process and if issues are noted, be fixed before the loan can be finalized. The processing timeframe on an FHA loan can take up to 45 days due to these guidelines.
Homebuyers interested in having a low down payment should really consider utilizing an FHA Loan. If you are ready to buy now but don’t want to wait until you have saved the 20%, then an FHA loan product is for you. Why throw money at high rent costs when you could begin to invest in your future by purchasing a home?
I am available to help answer any questions you, friends or family may have. I am your resource for all your home financing needs.
-Your Mortgage Coach Zach