Overview: FHA Home Loans
Achievable Down Payment Options
An FHA loan is a home loan the Federal Housing Administration insures. FHA loans require a smaller a down payment and lower closing costs and allow relaxed lending standards to help homeowners who don’t qualify for a conventional loan.
FHA loans allow a down payment of as little as 3.5% on a mortgage. This can make it possible for lower- and middle-income borrowers to buy a house when they don’t qualify for a conventional loan — which has stricter requirements, including a higher credit score and bigger down payment.
The main benefits of an FHA loan are:
ARM VS. fixed: Which should I choose?
An adjustable-rate mortgage, commonly referred to as an 'ARM', is a home loan with an interest rate that can change periodically. This means that the monthly payments can go up or down. In general, the initial interest rate is lower than that of a fixed-rate mortgage. After the fixed-rate period ends, the interest rate on an ARM loan moves based on the index it’s tied to.
When deciding if a fixed or ARM rate is right for you, there are some questions that you need to ask yourself:
How do I qualify for a FHA Home Loan?
FHA loans are a good option for first-time homebuyers who may not have saved enough for a large down payment. Even borrowers who have suffered from bankruptcy or foreclosures may qualify for an FHA-backed mortgage.
The major eligibility requirements include: