Since the housing market fell, the FHA has been underwriting homes at quadruple the rate of three years ago. Simply put, this means that more people are taking out FHA home loans and the Federal Housing Administration has been insuring more of them to fit the needs of more people. This short list gives some important facts that you should know when considering FHA home loans.
1. You don’t need perfect credit.
At Cherry Creek Mortgage Company, we only require a 640 credit score to take out FHA home loans. Some loans require a much higher score, but we as a mortgage bank want to allow a greater number of people to have access to the American dream of owning a home. Because of this, we also offer down payment assistance programs and a first time home buyers program to help anyone get the loan that they need, whether they are new college graduates or newly married.
2. The down payment is small.
With our down payment assistance programs, we can make a buyer’s dreams of homeownership come true. The FHA requires a minimum down payment of 3.5% of the purchase price of the home, and we at Cherry Creek are here to make that happen for home buyers. Most other loans require a much higher down payment, but the specialization of this type of loan is a big factor when considering FHA home loans.
3. The lender must be FHA-approved.
Loans do not come directly from the FHA. Rather, it is an insurance fund, and borrowers need to get their loan through an FHA-approved lender. Cherry Creek is approved, and our low interest rates and willingness to work with individual home buyers allow many to call us the best bank in Sacramento for FHA loans. We have experienced home loan lenders to help you in your search for FHA home loans as well as convenient help like the property search tool. We can’t wait to help you find the loan that is just right for you!
4. Extra cash is available for repair.
Considered by some to be the biggest advantage in this type of loan, the 203(k) plan allows buyers to finance money for repairs, such as painting or replacing cabinet fixtures. This is allowed because the loan amount is based not on the current value of the home, but the projected value after repairs are complete. Those who are looking to buy a home and fix it up consider this to be a huge advantage to FHA home loans.
5. Closing costs can be covered.
Most of the FHA home loans that we do here at Cherry Creek have a 30-year fixed rate, but there are other terms available. One advantage that our home loan lenders help with is the possibility of helping to pay with closing costs, such as an appraisal, credit report or title expenses. For more information about closing costs, down payment assistance programs, or FHA home loans in general, don’t hesitate to contact us today!