FHA Home Loans

What is an FHA Loan?

The FHA Loan is a Residential Home Loan insured by the Federal Housing Administration. The goal of an FHA loan is to give people, who don’t qualify for a non-FHA-backed mortgage, a chance at homeownership. FHA loans are aimed towards first-time home buyers and you can get an FHA loan with a lower credit score than you could have for a conventional mortgage.

It is one of the easiest and least demanding type of home loan to qualify for because it only requires a low down payment. Applicants must have a minimum credit score of 580+ for financing with a 3.5% down payment. However, borrowers must pay mortgage insurance premiums, which protects the lender if a borrower defaults.

What home buyers need to qualify:

  • Buyers must pay a minimum down payment of 3.5%
  • Minimum credit score of 580 or higher
  • Must have a steady employment history
  • The debt-to-income ratio of 31% to 43%
  • Must undergo a home appraisal
  • Buyers must provide needed documents (paycheck stubs, tax returns, etc.)

For buyers, refinancing their home loan could help them save bundles. If your credit score does not meet the minimum, it is best to improve your credit score first before you apply or work with a loan officer. Contact Loans Realty Group today to learn more!

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