If you’re searching for a home but are worried you can’t afford one, there’s another options for you. It’s called an FHA loan and it helps buyers purchase a home without paying a large down payment first.
FHA Loan Basics
A Federal Housing Administration, or FHA, loan is a type of funding backed by the federal government to make home buying easier for some people. Lenders approved by the FHA dispense these financing options. A loan like this can help you when you are looking for houses or condos for sale.
FHA Loan Benefits
An FHA loan can help you purchase a home, whether you are a first-time homebuyer or buying your second home. There are many benefits associated with an FHA loan, including these three:
- Low down payments
- Flexible terms
- Closing cost seller assistance
As each loan may be slightly different depending on the lender, there may be alternative or extra benefits available to you. The three listed above are the general ones associated with most FHA loans.
FHA Loan Requirements
Due to the nature of the loan, there are certain requirements that you must meet in order to qualify. The following items are what FHA lenders look at:
- Debt-to-income ratio
- Sufficient income to make payments
- Minimum credit score of 500
- A 3.5% down payment
- Mortgage insurance
Besides these requirements, you must also use the home you are purchasing as a primary residence. FHA lenders may have specific requirements, so it’s best to consult your lender for more information regarding an FHA loan and Los Angeles townhomes for sale.
Get Ready To Purchase Your New Home
If you thought homeownership was out of reach because you can’t afford a large down payment, think again. An FHA loan can help you purchase the home of your dreams with a small down payment. Contact a realtor today to begin your home search and mention you are applying for an FHA loan.