With the tax season upon us, it is important to know which program can be helpful and best for you. Buyers often get confused between an FHA loan and a conventional loan. Below are some of the main advantages that a buyer gets by choosing an FHA Loan.
LOW DOWN PAYMENT
A misconception among most buyers is that they need to save 10% or 20% of the sales price for down payment. The truth is that in an FHA loan, the minimum initial investment (down payment) is 3.5% of the sales price; allowing the buying process to be more affordable than one may think.
DON’T HAVE A PERFECT CREDIT? NOT A PROBLEM.
Some clients/borrowers may have some issues with their credit rating. Low credit ratings may not allow them to buy a house using a conventional loan. Our company (PRMI) offers an FHA loan program that helps these borrowers. Our unique FHA Choice Program can help borrowers with lower credit score (500 FICO and up). Borrowers that have filed for bankruptcy or undergone a foreclosure within the past few years, may still qualify for an FHA loan (granted they need to re-establish their credit and still need to meet other program requirements).
UPGRADES AND RENOVATIONS ARE PERMITTED
Some borrowers find their dream home, but they desire to do some upgrades and/or renovate their future home. In such cases, with a special program called the FHA 203(k) Loan, buyers can improve or renovate their home, including installation of energy efficient appliances. All this can be included into their loan and still allow them to pay the minimum down payment. Not bad, right?
MORE HELP IN CLOSING COST FROM THE SELLER
When buying a house, buyers are responsible for out of pocket expenses, such as, an appraisal fees, origination fees, attorney fees, and title fees, etc. Utilizing an FHA loan, the seller or the home builder can help by contributing up to 6% of the sales price for your closing cost. This will minimize your out of pocket expense.
Keep in mind that recently, the government reduced the monthly Mortgage Insurance premium for all FHA loans, from 1.35 % to .85%, giving you (the buyer) more buying power for your money. Remember, FHA offers a variety of mortgage products that can be utilized for your mortgage needs.
For more information about these programs and for a free mortgage analysis, feel free to call, email or text me. I am here to help you finance your home.
Edgar J Hernandez
- Branch Manager – PRMI RGV NMLS# 226169
- O: 956-616-4926
- Fax 1.800.519.7915
- Apply online: www.PRMIUSA.COM
Choose my name from the loan officer drop down menu.