If you are considering applying for an FHA loan, then you need to know the basics before you apply. There is no point in wasting your time if you know you will not qualify for this loan – instead, educate yourself beforehand so you can see if you’re a good candidate for this financial help! Curious if you are the perfect candidate? Check out these 5 FAQs before applying!
Top 5 FAQs about FHA loans
What is an FHA loan?
The most basic question is what is an FHA loan? This type of loan is a mortgage that is provided by the FHA – the Federal Housing Administration. Typically, this loan is only eligible for those who have a credit score of over 580 (which can be considered Fair/Good in most cases) and those who can put down at least 3.5% on a down payment for a house purchase. If you are a first-time homebuyer who is having trouble funding your new adventure, then you might find that FHA loans are the best alternative for you instead of spending all of our hard-earned cash on this investment.
Who is the FHA?
The FHA, or the Federal Housing Administration, is a part of the government that is a subset of the National Housing Act that was written in 1934 to help make houses around the entire country better-priced for individuals to become homeowners. Without this regulating agency, it would be very difficult for homeowners to find houses that were within their budget and price range, especially new home buyers.
Can I use a loan for property flipping?
If you are thinking about getting an FHA loan for property flipping, you need to read the details about FHA loan qualifications and rules about this procedure before applying. Property flipping is a type of process that involves a person purchasing a real estate property and then reselling it in a short amount of time after fixing or renovating the entire property or a portion of the land/house. Make sure you read about the property and determine if the house is eligible for an FHA loan.
FHA loans vs. conventional loans?
There are a few differences between an FHA loan and a conventional one – an FHA loan allows lower credit scores for those who are not as financially stable, they are more liberated in terms of their acceptance rules, and they often involve extra fees.
Types of FHA loans?
There are a few different types of FHA loans that you can choose from, such as a basic home mortgage loan, title property improvement loan, construction to permanent loan, and 203 rehab mortgage loan. Choose the type of specific FHA loan that works best for your housing needs, whether it is flipping a home or performing construction on a property.
Conclusion
If you are considering buying a home for yourself and your family, or you wanna flip a house for a real estate venture, consider getting an FHA loan to help you pay for this investment! Choosing an FHA loan can help new home buyers obtain the property of their dreams without spending all of their hard-earned income.