The Federal Housing Administration, or the FHA, has several programs in place ready to help people looking to buy their own home. If you're in the market for a new home but don't know if you'd qualify for a home loan, an FHA program can get you on the housing ladder. Here are three different FHA loans Fort Lauderdale should know about.
Features Of An FHA Loan
All FHA loans are designed to help people onto the property ladder, even if they thought they may not be able to buy their own home. The loans aren't paid out by the FHA themselves, rather, they back the loans through private lenders. That makes private lenders much happier to lend to people through the program, as it's much safer for them.
You can get an FHA loan if your credit score isn't quite where you want it to be. This makes mortgages available to those who didn't think they'd be able to qualify before. The credit score needed for an FHA loan is 580, although if your score is lower than that you're not necessarily disqualified from getting a loan.
The payoff here though, is that you'll pay more in mortgage insurance premiums. This is something that many first time buyers are happy to do though, as it helps them make that first step onto the property ladder.
1. The Adjustable Rate Loan
These loans are designed to help you buy a home that's more expensive but would be perfect for you. As the name implies, the rates on these mortgages will change over time. At first, the loan will have a fixed rate making it easier to secure that home. Over time, these rates will change as interest rates change, so you'll need to be ready for these changes.
People often get these loans when interest rates are low, so they can start paying their mortgage at a lower rate. That rate can change once or twice a year though, so if you want this loan, you'll need to be prepared for that.
When taken out at the right time, this loan can save you a lot of money. Be aware that you will need to pay more when interest rates go up. If you can afford these payments though, it's a good way of getting a home.
2. The Graduated Payment Mortgage
This FHA program is designed for those who know that their incomes are going to increase in the future. The loan starts out with smaller repayments, which increase in value over time. It's a great way to secure that home when you see it, without having to wait for that raise to come into effect.
There are five different repayment plans available under the Graduated Payment Mortgage, so you'll want to talk to Nationwide Home Loans about which one will be right for you. Be aware though, that these loans can only be used on single family residences that are intended to be the primary residence.
This loan is a great way to get the home of your dreams as soon as you see it, rather than waiting for your income to increase and risking it getting away from you.
3. The Home Equity Conversion Mortgage
This style of home loan is a little different from the others, as it's designed for those who already own their own home. It's a loan designed for those aged 62 or older and can help them supplement their income.
When you take this loan out, you'll be taking it out against the equity of your home. This means that you'll need to live in that home for the entire period of the loan. If you're looking to raise money without having to sell your home, then this is the best way of doing it.
The loan can be organized in three different ways:
- Equal monthly payments for the rest of your life.
- Equal monthly payments for an agreed period.
- A line of credit, although there are some caps on some lump sum withdrawals.
These are three FHA programs that every home buyer should know about. Are any of them useful to you? Ask NHL Lending if they're right for your needs.