Consider these 4 things before getting an

Robert Langston

CONSIDER THESE 4 THINGS BEFORE GETTING AN FHA LOAN

Finding the right type of loan to finance your homeownership dream can be stressful, especially for firsttime homebuyers. There are many things that you need to be aware of to make it through the buying process and finally becoming a homeowner. One thing you will often cross paths with is the Federal Housing Administration loan.

FHA loans are perhaps one of the most straightforward loans to secure as they have a low-down-payment, which makes it easy for people to access, especially people with a lowdown payment. Apart from a low-down payment, FHA loans have tons of other features for potential homebuyers like being assumable, which means that they can be transferred to another buyer who will take up the loan. However, there are some other things that you have to be aware of when taking an FHA loan. In this article, we are going to dive deeper into some of these things.

MORTGAGE INSURANCE Did you know that for the life of the loan, you will be subjected to mortgage insurance? When a buyer is not paying a 20% down payment, mortgage insurance will apply. The buyer has to pay monthly mortgage insurance, which is meant to protect lenders in case of default on loan. Mortgage insurance basically is the price that you have to pay for landing a mortgage with lenient qualifications. Not all homes can be bought using FHA loans To get approved for an FHA loan, the house you are considering buying has to pass an inspection conducted by the U.S. Department of Housing and Urban Development. A HUD appraiser will determine the market value of the home and whether the house is safe for you to stay.

“Many people don’t know that the guidelines can be pretty strict for an FHA loan,” says Paolo Matita, a former real estate agent who says the inspection was an issue for his FHA loan–holding clients. “The roof, A.C. unit, plumbing, and electrical all need to be fully functional and be able to last for several years if they’re going to pass inspection.”

Additionally, if the house will require a few modifications before being sold, they have to be done first, which presents another hurdle for the buyer since they are responsible for the repairs.

IT’S POSSIBLE YOU MIGHT NOT BE ABLE TO USE FHA LOAN FOR RENOVATIONS This is another hurdle for the buyers. With FHA 203(k) loan, you can dedicate up to $35K for home improvement and renovations. The lenders will stipulate the kind of repairs allowable, but the 203(k) loan can be the solution you are looking for. Therefore, before taking out any FHA loan, do your research and find out whether the loan you want will be all-inclusive of your needs.

You are still required to have a decent credit People assume that getting an FHA loan is a free pass. However, buyers still need to have a 580-credit score to take advantage of the 3.5% down payment option. The lenders in their part have to stake and will often demand a credit score of 600 or even higher for you to qualify for this loan. In addition, you will find that there are tons of considerations that have to be made for you to be eligible for an FHA loan, and one of them is the amount of debt that you can carry. As such, it is advisable that you check the current guidelines to make sure that the debt you have is manageable.

If you would like to find out more about the FHA loan program, connect today with Robert Langston. One of the VIP agents with the Power Is Now Media representing the beautiful county of Sacramento. To learn more about the program, go to https:// thepowerisnow.com/vipagentsservices/, where you can also find the agent near you.

With a strong desire to help buyers and sellers in all types of situations, Robert E. Langston lends his expertise as a real estate broker in and around the surrounding areas of Fairfield and Sacramento, California. For the best results, you want to work with an agent who understands his market well, and Bobby is your agent. Learn more about Bobby and how he can help you buy your dream home here.

Robert Langston President & CEO Bobby Real Estate Sources: https://www.realtor.com/advice/finance/fha-loanwhat-i-wish-known/ https://www.fha.com/fha_requirements_checklist