An FHA loan or Federal Housing Administration loan is a type of loan that is insured by the Federal Housing Administration, which is the part of the U.S. Department of Housing and Urban Development (HUD). FHA loans are designed to make homeownership more accessible to individuals who may not qualify for conventional loans due to lower credit scores or a smaller down payment.
One of the main advantages of an FHA loan is that it allows borrowers to put down a lower down payment, typically low as 3.5% of the purchase price. Additionally, FHA loans have more lenient credit requirements compared to conventional loans, making them more accessible to borrowers with lower credit scores.
It is important to know that FHA loans comes with certain requirements and fees. As of 2023 560 credit score must be at least 560 with 3.5% down payment and cash-out up to 80% of home value and demographically up to 472k. High-cost areas up to 1 million. Buyers are required to pay an up front mortgage insurance premium (MIP) and ongoing monthly mortgage insurance premiums. These insurance premiums help protect the lender in case the borrower defaults on the loan. FHA loans can be a good option for the first time buyer or individuals with limited down payment savings or lower credit scores. However, it's always recommended to consult with a mortgage professional to determine if an FHA loan is the best fit for your specific situation. Also as it stands as of 2023, this loan allows 6% seller contributions with any down payment percentage. Once approved, see your trusted advisor.
As a trusted advisor. professional realtor and retired military veteran I am here to serve you in the Dr. Phillips and the Central Florida area. Always stay in tuned, educated and connected in this volatile housing market, to purchase or for the sale of your home. In the absence of up to date trustworthy information whether it is a housing crisis or local housing market, real estate decisions are being driven by fear, uncertainty and doubt. We as trusted advisors drive the real estate community to ensure you are making the right decision.
Part of my job is to keep you informed and educated on the housing market trends, buying information on the buying and selling process to include real estate common terms and videos. Don't get confused about the news, that talk about national data and I can provide most current up to date local area data.
So don't let this shifting housing market delay your dreams, data reveals home values typically appreciate over time and that gives your net worth a nice boost. When you are looking for a realtor, look for your realtor that has the heart of a teacher. If you are ready to start your journey, contact me today at 850 496-6412 to begin a new walk to homeownership and all your real estate needs.