It’s official. You’re ready to own a home! You’ve got excellent credit, a steady job and plans for a profitable future. Life ahead couldn’t be laid out more perfectly. But let’s back up a minute. How much do you know about the loan for which you’ve qualified? If you aren’t that far in the process, how much do you know about your loan options and their influence on your financial future?
Being armed with information on your home loan is crucial. Arizona FHA home loans provide an excellent way for under qualified buyers to purchase a home, but let’s make sure you know exactly what you’re getting into.
FHA Home Loans Facts
- FHA means your mortgage is insured by the Federal Housing Administration
- FHA is a part of the U.S. Department of Housing and Urban Development
- You (the borrower) pays mortgage insurance to protect the lender in case of a default
- FHA is not paying for the loan; rather insuring it. Borrowers must borrow from a select FHA lender list
- Qualifications are flexible because you’re paying on insurance – essentially betting on yourself to make payments in spite of your current situation
- Flexibility does not usually lend itself to borrowers with credit scores under 500
- Nontraditional credit history and insufficient credit offer loopholes to the qualification process
- With FHA loans, down payments can be made with savings, state grants, government assistance or gifted cash from a family member
- Home sellers, lenders and builders can contribute to the borrower’s closing costs, but will usually tack on a higher interest rate
- Insurance premiums are charged, but may be included in monthly payments
- Cash might be available to borrow for home repairs
- Getting out of an FHA loan on which a borrower cannot make payments is not easy, but it is possible to qualify for temporary relief
- FHA is not set up to trick you into drowning in interest. However, you need to be clear with your personal situation and fixed foreseeable future on the likelihood of your ability to keep up and even surpass payment expectations.
When you’re ready to invest in your home with FHA home loans Phoenix, be smart. If you need more information or guidance on the loan and mortgage process, reach out to Nova Home Loans. We specialize in getting you to where you want to be, educating you expertly along the way.