It can be a huge and daunting task to deal with the financial side of purchasing a home or starting substantial home repairs. FHA stands for Federal Housing Administration. It is an agency of the federal government. The aim of the FHA is to insure private loans issued for new and existing housing and for home repairs.
The FHA was originally formed by congress in 1934. By 1965 it had become part of the Department of Housing and Urban Development’s Office of Housing. Applying for an FHA loan should help enable people to become homeowners when they otherwise may not financially be able to in the eyes of the bank. The act of insuring the loan can also enable the borrower to get a better deal. An FHA loan application can allow you to achieve low down payments, low closing costs and easy credit qualifying.
Using an FHA loan application can be a great help in buying your first home with a down payment as low as 3.5% of the purchase price. Also most of your fees and closing costs will be included in the loan.
When applying for an FHA loan it also possible to choose to use the amount to re-model or repair your own home. It is possible to refinance the amount that you still owe and add the cost of the needed repairs in one simple loan option. This is also a relevant scheme for the purchase of a home that immediately needs repairs, making it simple and easy to pay of costs of purchase and fixing anything. In terms of the environment it is possible to use this loan support for improving energy efficiency and reducing energy costs in your home.
FHA loans are very accommodating to people from different walks of life and ages. It is possible to get an FHA loan for mobile homes and manufactured housing on privately owned land or mobile home parks. People of any adult age can apply for an FHA loan including senior citizens. If you are 62 or older and own your home or have a low loan balance then FHA can convert a portion of your equity into cash.
Applying for this type of loan involves an amount of preparation. It is important to work on your overall credit score for the application process, as the FHA requires a good credit rating. The application process will also require you to present two years worth of information. This includes all previous addresses, your employer’s name and address, W-2 tax forms and IRS tax returns. Also, monthly gross income must be provided. The basic necessity is that you must be able to show that you are employable in a steady job especially, and that you are financially sensible and reliable enough to continue payments towards your specific loan.
FHA loans can be a great way for people to require less cash when purchasing a home. Lenders can also feel protected which may get you a much better deal with more flexible payments and fees.