What Are The Advantages Of An FHA Mortgage?
FHA home loans are for every financially qualified borrower. You don’t have to be a first-time home buyer, and you don’t have to worry about income caps or household income limits when applying for an FHA mortgage.
And there are many other FHA loan benefits as well.
Consumer protection with an FHA loan
An important benefit and protection for the FHA borrower is an FHA requirement in order for a home to be approved for an FHA mortgage. It must have a residual economic life for the life of the loan.
That’s important – what’s the use of owning a house that can’t be sold?
The condition of the house when it closes must be such that it is suitable for resale at any point during the mortgage. If the basic condition of the home did not support a residual economic life for the entire term of the loan of a maximum of 30 years, it would not be approved for an FHA housing loan.
FHA loans have low down payments
FHA mortgages require a down payment. This is different from USDA mortgages or VA home loans.
FHA loans are characterized by lower down payment requirements – compare the maximum FHA funding rules to certain traditional mortgages and you will find that an FHA mortgage only requires 3.5% less unless your FICO scores don’t meet them FHA minimum and lender requirements.
FHA loans also reinforce the low down payment requirement by allowing down payment support from recognized sources.
FHA mortgages for apartment buildings
FHA borrowers can apply to purchase a property of up to four units – this purchase is possible for those who are financially qualified and who intend to live in at least one of the units as a residential address.
FHA loans require an occupancy, but you are free to occupy some of the units in the house and rent the unused ones.
FHA loans for purchase, construction or renovation
With an FHA single family home loan, you can buy, build, or renovate an existing property with a small down payment.
These loan options include the FHA One-Time Close Mortgage Loan, the FHA 203 (k) Rehabilitation Mortgage, and the Standard FHA Existing Real Estate Purchase Loan. You can also apply for an FHA RV loan.
Early withdrawal, no penalties
Do you think that early repayment only refers to the repayment of the mortgage over the entire term of 15 or 30 years? Don’t forget about situations where you may want to repay the loan early! Some conventional mortgages have prepayment penalties.
FHA loans are required by law to be issued without such early repayment consequences.
Speak to a participating lender if you have any questions about any or more of these aspects of the FHA family home loan program. Have your questions answered in the planning phase – you will not regret it.