Many financial consultants have concluded that an FHA house loan is ideal for first time home buyers. The reason is that when you are a first timer, you are only required to pay a 3.5 percent down payment: so that really is something that appeals to those who are planning to get their first home. In addition to this, an FHA house loan is also a great choice for those who have a low credit score or low income as well.
What Is An FHA House Loan?
An FHA house loan is certified and approved by the Federal Housing Administration. For those people who are not yet aware about FHA, this is a government program that insures house loans. In any way, the FHA is not the one who makes the fund for your loan; in fact, it is the FHA which only provides an insurance to assist the people to get their own home and become home owners.
In a clearer sense, there are lenders and creditors that are accredited by the FHA to give an amount of money that is needed by a borrower in purchasing his or her new home. With regards to this, the lender is assured that the money that was lent to the borrower will come back to them in the case that the borrower defaults on the loan payments.
For as little as 3.5 percent interest, many first time house owners can begin living in their first house. In fact, 3.5% is probably the lowest offer that one can get in today’s economy. If you have a low credit score, securing an FHA house loan might not be a problem. To make any FHA home loan application process smoother, you out to enlist the help of a qualified financial advisor who is experienced with FHA loans as well as the first time buyer process, to ensure that you are guided correctly in getting your FHA house loan.
In general, an FHA house loan may not require maximum income levels, depending upon the amount required. Borrowers should check their mortgage banker to understand the specific requirements for the county in which they are financing the house. A county-specific FHA house loan maximum is the one that is required by FHA.