When you are shopping for home loans, do not forget about Federal Housing Administration (FHA) loans. These agreements provide major benefits for many home buyers, and applying for one could be a solid plan for you. Homeowners in Winchester and the surrounding areas, including Strasburg, Front Royal, and Stephenson, can reap the advantages that these loans have to offer.
Federal Housing Administration (FHA) Loans Explained
The Federal Housing Administration (FHA) insures these loans, which are mortgages. This sort of loan can be particularly appealing, since the down payment has the potential to be very low. However, those who take out these loans should know that paying premiums for mortgage insurance is part of the agreement. The insurance protects the lender if a borrower should default on an FHA loan.
The FHA started this program because of the high number of foreclosures and defaults that occurred in the 1930s. The program made mortgages accessible and affordable for people without good credit histories. This stimulated the housing market, which was advantageous to people selling their homes, as well as the industries that could profit from a good housing market. Additionally, the program provided some assurance that mortgage lenders could be sufficiently insured against loss. This is because the government insures FHA loans for lenders, decreasing their risk when individuals do not make their mortgage payments.
If your credit score is 580 or more, you could qualify for this type of home loan with a relatively low down payment. If your credit score is lower than 580 but higher than 499, you might qualify with a down payment of 10 percent. Interest will generally be higher for lower credit scores.
Why You May Want an FHA Loan
Typically, this kind of loan is not difficult to qualify for, as your credit does not have to be perfect. People with low or bad credit can still qualify for FHA loans. Even those who have filed for bankruptcy or experienced foreclosure have the potential to qualify for these mortgages. Another top benefit of securing this sort of loan is that a buyer can take it over if you sell it later.
While these loans can be highly convenient for people with lower incomes, the loans have no income limit. Unlike with some of the programs designed for first-time buyers, you can qualify for an FHA loan even if your income is relatively higher than other applicants.
Talk to Us About an FHA Loan
An FHA mortgage could be suitable for you, so feel free to consult Homespire Mortgage about these loans. Your consultant can be available throughout the week, including during the weekend. We serve the homeowners of Winchester, VA, and those in the surrounding areas, such as Leesburg, Purcellville, and Round Hill. Contact us today for more information on Federal Housing Administration loans. We are always ready to help you explore the options.
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