When looking to purchase a home, deciding on financing options can be a bit complicated. Since the downfall of the economy and housing market, financial institutions have significantly changed their requirements for obtaining a mortgage. The government has also had their hands in helping consumers obtain a home without the hassle and frustration. As such, the Federal Housing Association has insured certain lenders, which allows them to issue FHA loans to those with less than perfect credit. First time homeowners have benefited from obtaining an fha loan in Tucson such as the advantages listed below.
What most home buyers like about FHA loans is the eligibility requirements are less strict. Applicants can put down as little as 3.5% on the home, which is much less than the 5% or more other mortgage options might require. Credit scores are still essential; however, more home buyers have been able to obtain a home because the requirement is a minimum credit score of 620. Traditional mortgages require a credit score of at least 650 or better.
When applying for an FHA loan, applicants are allowed to purchase a home that needs a little tender love and care. The loan also offers a mortgage insurance program, which allows homeowners to make necessary repairs to the home. As opposed to paying for the costs of repairs upfront, homeowners are allowed to roll the repair expenses into their mortgage. As work is completed on the home, the mortgage also offers sweat equity on the home, which means the costs of labor and materials can be counted towards the down payment on the home.
FHA loans in Tucson have afforded so many middle and working class families the ability to own their own home. Traditional mortgages require fair to perfect credit scores, higher down payments, low debt to income ratio, and higher closing costs. It is important to note, however, that fha loans do not come from the Federal Housing Association directly. Those interested in such mortgages will have to shop around for a lender that offers such financing options. By shopping around, you can obtain a decent FHA loan at reasonable interest rates.
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