When to Apply for an FHA Loan
Are you thinking about purchasing a home? Do you have less than 10% of the home’s sales price saved for a down payment? Or, do you have less than perfect credit? If the answer to either of the last two questions is yes, an FHA mortgage loan may be right for you.
FHA, which stands for Federal Housing Administration, does not actually make loans. FHA provides mortgage insurance which acts as a guarantee that mortgage lenders can recover their investment in the event of a borrower foreclosure.
There are many benefits associated with FHA loans. Two of the more important benefits are lower down payment requirements and easier credit underwriting guidelines. FHA only requires a 3.5% minimum down payment, which can be entirely gifted from a family member. Also, FHA loans allow for less than perfect credit. For example, a borrower can have some isolated late payments and a few collections and still qualify for an FHA loan.
If you are in need of an FHA loan in Illinois, Indiana, Michigan, Wisconsin, or Minnesota please contact one of our mortgage bankers today.