Characteristics that make FHA mortgage the best for first time homebuyers in Dallas
Part of the American dream is to ensure that majority of people are able to own homes. As a way of supporting the attainment of this dream, the US government has backed various mortgage programs that target different groups of its population. The government insured programs include VA, FHA and USDA. When looking for first time home buyer program Dallas, the aforementioned mortgages are the best. The VA program targets people working for the US military and the veterans. The USDA mortgage is meant for people living in the rural areas of the US. In case your scores are low, your credit history is bad and you have not saved enough down payments for a conventional loan, the FHA program is the best for you. This article will focus on the various qualities that make FHA program the best for Dallas first time home buyers.
Low down payment
Compared to conventional loans that require huge down payment when applying for them, the FHA loans demand for a low amount to be put down. Whereas conventional loans may require that you put down 20% of the total loan amount that you want to borrow, FHA loan demand that you put down 3.5% of the total amount that you’re borrowing. The FICO score you have will be used to determine the amount you’ll put down. In this regard, in case you have scored above 580, you’ll put down 3.5% of the total amount that you’re borrowing. If your score ranges from 500 to 579, you’ll be required to put down 10% of the total loan you’re applying for. The good news is that FHA accepts gift funds from your friends, family and certain institutions in case you lack enough down payments.
Low interest rates
The main function of Federal Housing Administration is to insure loans that have been made by approved lenders. The official lenders provide the FHA loans at their own rates. This means that there are no uniform FHA rates in the market. You must shop around to find the lender with the best FHA rates. Generally, most lenders offer these loans at low rates because they are covered by the government.
Government backed
The FHA programs are government backed. This means that these programs are popular to many lenders because of the assurance of compensation in case you default on loan repayment. This is the main reason why you make a low down payment and repay the loan with low rates.
Poor scores and imperfect credit history
In case you’re Dallas first time home buyer program with poor scores and imperfect credit history, the FHA loan is the best for you. You can apply for the mortgage when your scores are as low as 500.
