Ever thought about buying your own home, but decided you'd never get a mortgage? There are actually ways for you to get the home loan you need. If you think you wouldn't be approved for Miramar home loans, then an FHA loan could be the right option for you. Here's everything you need to know.
What Is An FHA Loan?
The FHA stands for the Federal Housing Administration, who back these particular kinds of home loans. They were originally in action right after the downturn of the housing market in the 1930's. There were foreclosures happening because many couldn't afford their homes, and the market was in a slump as a result. The FHA decided to get involved to bring it back to life.
The same is happening now. Many people who would be the first time buyers simply can't afford to get on the property ladder. Rents are too high and it's difficult to save enough to get a regular home loan. That's why FHA loans are becoming a good option.
An FHA loan is essentially a home loan that's backed by the FHA. They're often a lot more affordable than regular home loans, meaning you can afford to buy your own property.
How Does The Loan Work?
When you take out a Miramar FHA loan, you'll be asked to meet some certain requirements. These include:
- A credit score of at least 580 (although if yours is lower, then you're not necessarily excluded from an FHA loan).
- A valid US social security number.
- A minimum down payment of 3.5%.
- Steady income for at least two years, or to have been working for the same employer for two years.
If you meet these requirements, then you could be eligible for a loan. The FHA loan is designed to be as risk-free as possible to the lender. They back the loan, therefore taking on all the risks. That means if you default on payments, then they will cover them for the lender. That means lenders are able to lend to those with poorer credit scores, as they know the payments will be covered.
FHA Mortgage Insurance
As the FHA will be backing your loan, you'll need to pay mortgage insurance in your mortgage payments. This is what the FHA will use to cover your payments if you default. The amounts differ, depending on how much you're borrowing and how long for. When you're looking into Miramar mortgage rates, you'll see how much you'll be expected to pay in insurance rates.
A More Accessible Home Loan
Many first time home buyers find the FHA home loan to be the best way of financing the home. The main draw is the fact you don't need a stellar credit score in order to obtain one. Having a low credit score can block you out of regular home loans, but now you can still obtain one. That being said, the better your credit score is, the more affordable your loan will be. It's very worthwhile to work on your credit score and try and bring it up, before you start shopping around for loans.
It's easy to start planning for this kind of loan, too. You'll need to have a steady income, or be working for the same employer, for at least two years. As you'll be saving for a down payment, you'll already be looking to stay in the same employment so this is quite simple. Those two years give you time to get some cash together and improve that credit score.
A Loan To Get You Started
Here at Nationwide Home Loans, we know how hard it can be to get on that property ladder. It's hard to even get started when you don't know where to look. That's why we'll help you make sense of all your options. You may find that an FHA loan is the best way forward, and if that's the case, we'll help you get the best rates.
We're dedicated to helping all our clients get the loan they need. We'll spend time with you to understand your circumstances and work with you to decide on what you need. We'll always look for the best deal for you to help you get that dream home.
There you have it. You may have thought that you can't buy your own home because of your earnings or credit score. As you can see though, there are options! The FHA loan may be just what you need to finally buy your own home.