Shopping for a new home can be an exhilarating time, but the last thing that you want to happen is finding out that you are not able to get the loan that you need because your credit score is a bit lower than the lending institutions would like. In some cases, even if you have a decent amount of money saved up for a deposit on your home, the chances are that you could still be denied for your credit score when applying for a conventional mortgage. To get the funding that you need for your new home, you may need to look further into getting an FHA loan in Phoenix so that you can invest in your dream dwelling.
Is It A Good Idea To Get An FHA Loan?
When you are looking to buy a house, but you could be deemed as being credit-challenged for one reason or another, an FHA Loan might be a good option for you. The average credit score of around 620 is best when trying to get a conventional mortgage. Therefore, if you have a credit score that is lower, you might be able to qualify for an FHA loan as long as you can meet the minimum down payment requirement.
How Does An FHA Loan Work?
An FHA loan is a type of mortgage that has been insured through the FHA or Federal Housing Administration. This is a loan that is popular for first-time homebuyers because it will allow for a down payment as low as 3.5% as well as a lower credit score that is around 580 or above. However, the borrower will have to be able to pay the mortgage insurance premiums, which are in place to help protect the lending institution should the borrower go into default.
Who Qualifies For An FHA Loan?
To qualify for an FHA loan in Phoenix, you will have to meet several criteria. Not only do you have to show that you have verifiable income, but you also need to be able to afford your regular payment as well as any existing debt. It is vital that you can show established credit history and have saved up at least 3.5% for your down payment on your potential new home. There are also specific guidelines in place, such as the simple fact that you cannot buy a home that exceeds the limits of the FHA loan terms.
Are you interested in learning more about your potential for getting an FHA loan in Phoenix? If so, you can find all of the information on the advantages of such a loan by merely working with the right company. This type of loan is what is known as an assumable mortgage, meaning if you are looking to sell your home in the future, the potential buyer can take on the current loan that you have. This is one advantage that you will generally not find with other types of mortgages. To find out more, we would love to talk with you about FHA loans and your ability to get the funding that you need to move into your dream home at The Potempa Team at Fairway.