5 myths about FHA Loans you need to know!
Real estate professionals and homebuyers often don’t even consider or get spooked away from the idea of pursuing an FHA loan, but millions of people have been able to secure their home because of them.
An FHA loan is a government-backed mortgage insured by the Federal Housing Administration. We’re looking to clear up myths about an FHA loan we often hear, because it might be a viable option for you when working with Aksarben Mortgage.
MYTH: FHA loans are exclusively for first-time homebuyers
“A lot of people traditionally think FHA stands for first-time homebuyers, but you don’t have to be a first-time homebuyer to qualify,” said Nick Zwiebel, Aksarben Mortgage co-owner and mortgage loan originator. “Most lenders only really focus on conventional loans, but we usually have a wider array of products than maybe a traditional bank or credit union.
MYTH: FHA loans are harder to qualify for these days.
Actually, quite the opposite.
“You might not qualify for a conventional loan, you might have challenged credit,” Zwiebel said. "That doesn't mean you don't have options."
Conventional loans sometimes cost less than FHA loans but can be more difficult to get.
FHA home loans require lower minimum credit scores and down payments than many conventional loans, which makes them especially popular with first-time homebuyers. The intent of an FHA loan is to give borrowers with lower credit scores or/and limited down payment funds a chance to buy a home.
MYTH: FHA loans are intended for only for single family homes
Actually, they can be used to buy all kinds of homes: Single family, manufactured homes, 1-4 unit homes and more.
MYTH: FHA loans will require 20% down payment
That’s false. FHA-approved lenders can often offer loans with as little as 3.5% down
The minimum FHA loan down payment is either 3.5 percent or 10 percent, depending on your credit score. Anyone with a credit score of 580 or higher, 3.5 percent is the minimum required for a down payment. A person with a credit score of 500 to 579 will have to have 10 percent for a down payment
MYTH: FHA loans can only cover the value of the house
Again, not true. If your house-to-be needs work, you can potentially finance home improvements through a FHA 203(k) loan.
We here at Aksarben Mortgage have the team and tools to help you secure your dream home. Contact Zwiebel or any of our representatives today to help you get started.
* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.