25 May Why FHA Loans Are Your Best Option For Home Ownership
One of the most satisfying things you can do for your family is get into a suitable home that meets your needs and provides the protection, comfort and security you’re looking for. While this is no doubt the goal for most people and families, there are often barriers to reaching this objective. One frustration people often encounter in this process is qualifying for a loan. There can be many restrictions and regulations involved when working through the home buying process. Some of these make it difficult for hardworking families to obtaining the funding they need. If you have struggled in the past getting a lender to approve your loan, try FHA loans. These government-sponsored loans have helped countless people attain their dreams where doors might have been closed to them in the past. The following are some pros to seeking these loans.
Less Strict Credit Guidelines
In the world of loan qualification, credit is significant. A person’s credit score is an indications or his her spending habits and of their history in repaying loans and keeping on track with monthly payments. Be better you are at doing these things, the better your credit score will be. Struggles with debt and late payments will lower your score. If your credit score isn’t where you’d like to be, obtaining additional loans, including home loans, can be a difficult prospect. But if you’re score is lower than ideal, don’t worry. FHA loans have more lenient rules when it comes to credit scores. With this funding, your score can be in the low 600s, and you may still qualify.
Smaller Down Payment Required
If you aren’t coming to the table with a large down payment, a conventional loan probably isn’t’ going to work out for you. This can be a common problem with first-time homebuyers. Coming up with 5 percent down or more might be an unattainable goal at this point. Thankfully, FHA loan lenders only require 3.5 percent down for purchases. This means discouraged people who couldn’t get into the home they wanted because they lacked up-front cash can still find the home of their dreams.
Flexible Debt-to-Income Ratios
Lenders want to make sure you’ll be able to handle the financial challenges of paying your monthly mortgage. If you have a crushing load of debt, meeting your obligations can be difficult. FHA loans aren’t as strict when assessing the debt-to-income ratio. This means if you’ve struggled in the past with debt but are working to make improvements, you may still qualify for your home.
Bankruptcy and Foreclosure Leniency
Bankruptcy and foreclosure are two words you don’t want to hear when it comes to your home. Unfortunately, they can be a harsh reality. However, when you go the FHA route, your lender will be much more willing to work with you at finding a solution to avoid these devastating consequences.
If you’ve been turned down for loans in the past due to poor credit, high-debt-to-income ratios or not enough for a down payment, don’t worry. FHA loans are designed specifically with you in mind.