As a renter, you might be making a large monthly rent payment in addition to everyday household costs. These may include your internet, utilities, food, expenses for small repairs and other common household expenses. If you’re looking for a way to lower your long-term living costs or at least get a better return on the money you are already spending, then you might want to consider buying a home.
Buying a house may seem like a far-fetched idea, especially if your credit history is not particularly strong or if you do not have enough money saved up to put down 20% on a mortgage loan. However, even if your finances are not excellent, you may still be able to buy a home with some help from the Federal Housing Administration (FHA).
FHA loans can be a great option for first-time buyers, and it’s easy to see why:
- FHA loans can require a down payment of as little as 3.5%.
- When the FHA insures your loan, lenders are more likely to give you better terms than they would otherwise.
- You don’t need to have a high credit score.
If you have a credit score of at least 580, you may be able to take advantage of the 3.5% minimum down payment. However, even with a credit score as low as 500, you may still get approved for an FHA loan as long as you have a down payment of 10% or higher.
This is a stark contrast to conventional mortgages, where most buyers would need 20% as a down payment and a credit score of at least 620.
Plus, FHA loan limits continue to rise with the cost of home prices. That means you may be able to buy a pricier home using an FHA loan, especially if the home is located in a “high cost area.”
In 2023, the “floor” limit (the lowest limit for home prices) is $472,030. The “ceiling” (the highest limit for home prices) is $1,089,300.
You can even use first-time buyer aid programs in your state to cover some of the costs of your down payment. With the right program, you might be able to get your property without having to put down ANY cash.
You can find different programs that meet your current situation, including the following:
- The FHA Multifamily Loan
- The FHA Loan for Self-Employed Americans
- The FHA Home Repair Loan
If you already have an FHA mortgage, you can refinance through the FHA simple refinance program and get lower payments, lower interest rates and more time to repay the money you owe!
By Admin –