Fha Mortgage Lender Brings You That Beautiful Home

Many mistakenly believe that bad credit or lack of down payment closes all doors to home ownership. This is not the case. An FHA mortgage lender can make that home ownership dream come true. FHA stands for the Federal Housing Administration. It was created in order to facilitate home ownership for Americans previously shut out of the system. There were many reasons stopping a large number of people from owning a home. The first relates to credit. Most private lenders have minimum credit score requirements. If you have poor credit that serves to eliminate you for consideration for most private lenders. However, with an FHA backed loan your low credit score isn't an issue. An FHA loan only has two stipulations in terms of credit. The borrower could not have filed for bankruptcy within the previous two years. If so, you must wait for the two year period to have elapsed before applying for an FHA backed loan. Additionally, the applicant won't be considered if they were subject to a foreclosure within the past 3 years. The second facet of FHA loan advantages is in the realm of the down payment. Most lenders now require a full 20% down payment. For a brief period recently many lenders greatly lowered this amount. Some were even financing more than the amount of the home purchase. Those days have now ended. Most all lenders have reverted back to the traditional 20% requirement. Considering the average home price, this often equates to over $15,000 required for the down payment. Many just starting out in life have not yet saved this amount of money. The Federal Housing Administration came up with a solution. FHA loans only require a down payment of 3% of the property's purchase price. This puts the amount required well within most everyone's reach. Another way that FHA loans make buying a home relates to closing costs. Most all mortgages entail fees and some include what are called "points". These are costs typically borne by the borrower and due in full at closing. These fees can run into the thousands of dollars and present a further obstacle for new buyers. FHA loans stipulate that half of these costs are absorbed by the lender. This alone saves the borrower significant money. Additionally, the other half of the closing costs can be added to the loan balance. This allows their payment to be spread over many years. The additional amount per month associated with them is usually minimal in this scenario. If you think that not having enough down payment or bad credit is stopping you from owning a home, then you need to look at a FHA mortgage lender. This program was made for you. Assuming you meet the requirements, an FHA loan is a smart route to clearing the hurdles of getting that mortgage.