We understand that the prospect of buying a house, especially for potential new homeowners, may seem unattainable for many. It is a major undertaking and could very likely be the largest purchase you’ve ever considered making. This often turns people away from the idea, as they assume they simply can’t make it work. While purchasing a home certainly requires a stable financial situation, it is probably more within your reach than you may expect. In today’s blog, Family Home Loan Texas discusses how FHA Loans can help make buying a house possible for many individuals.
You Don’t Need A 20% Down Payment
In the past, there general rule of thumb for buying a house was that you had to put 20% down. While this is still the case for many conventional mortgages — and it does have its advantages for those who can afford it — it is by no means the norm. In fact, today there are many options for significantly lower down payments. With an FHA Loan, you can pay as little as 3.5% for a traditional mortgage. This is especially advantageous for new buyers who do not have equity built up yet.
Why The Down Payment Is Lower
Lenders are willing to accept a lower down payment because FHA Loans are backed by the federal government — the Federal Housing Administration, to be precise (hence the name). Because the government backs them, lenders can take the “risk” of a lower initial payment. It should be noted, however, that when you opt for a loan with a lower down payment, you will most likely have to pay a higher monthly interest rate as well as pay for mortgage insurance. Overall, you will need to assess your finances to see what you can afford both as a down payment and as your monthly mortgage. Just remember that the higher you can pay upfront, the less you will have to pay overtime in interest.
There Are Several Types Of FHA Loans
While, above, we discussed these loans in the context of buying a house, the Federal Housing Administration backs other types, as well. The HECM (Home Equity Conversion Mortgage) is a kind of reverse mortgage that the government backs. This allows those who qualify to use their home equity as leverage to receive payments from a lender. Another type is an FHA Energy Efficient Mortgage. This kind allows for more money to go towards home improvements that are energy-efficient.
Call Us For More Information About FHA Loans
We are always happy to talk to you about this type of loan or any other. If you have any questions, please do not hesitate to reach out. Family Home Loan Texas was founded by loan originator and long-time mortgage professional Rob Bramer. Rob has helped clients secure the loans they need both locally and nationally and can help you get the loan you need to live life on your terms. Call 1-800-990-LEND (5363) to speak with Rob about how he and his team can help you through all aspects of buying a home — including FHA Loans.
