Why Consider FHA Loans Plano When Buying A House
There are many types of home loans available to help you finance a home purchase. You can also choose the mortgage term – which is the amount of time it takes to pay off the loan. But do low-income earners and individuals with bad credit have a chance to buy a house with the help of a home loan?
The short answer is yes. There are mortgage options available that accept borrowers who have a low credit score, can only afford small deposits and have a hard time applying for other home loans. Take FHA Loans Plano, for example. Many home buyers ask for this type of mortgage to realize their dream of finally buying their own house. But why consider an FHA mortgage? Here are the best reasons why.
Small Down Payment
Many average-earning individuals choose FHA Loans because of its low down payment requirement. The minimum deposit required is 3.5%. This means if you’re planning to buy a house with the purchase price of $280,000, you need to have at least $9,800.00 cash as a down payment to qualify.
Down Payment As Gifts
Another reason many prefer an FHA loan over other mortgage options is that lenders accept down payments to be gifts. You need to provide proof that the donor gave you the funds as a down payment gift. It will not be a loan you will need to pay back to them. You should have a gift letter from the donor as proof of the transaction.
Easier Approval Even After A Recent Financial Crisis
Let’s say you recently filed for bankruptcy, or your last home was foreclosed. Unlike other loan options, FHA Loans Plano gives you a chance to rest, making it easier for you to get approved for a mortgage. You can apply for an FHA loan even just after two or three years of a financial crisis.
Geared For Low-Income Borrowers
An FHA Mortgage requires no minimum income. This means for as long as you meet the minimum requirements, and you can demonstrate the ability to pay off the home loan, you can get approval. However, this doesn’t mean individuals with high income can’t apply.
Low Credit Score Requirement
Borrowers with bad credit may think they have no chance of getting approved for a mortgage. The thing is, you can still get approved if you have at least 580 credit score. Some lenders will approve your application even if your score is lower. This is as long as you can compensate with a bigger down payment.
You may not think you have a big chance of landing a mortgage approval. However, it’s always worth trying to talk to a reputable lender. This way, you can see if you can compensate on other factors. If not, you will know what areas you need to improve to avoid getting rejected for a home loan.
Did you know that an FHA mortgage to get extra funding for home repairs and maintenance? That’s right. You can do this above and beyond your original loan. FHA’s 203K program is for borrowers planning to renovate their homes. You can take advantage of this to increase the value of your home.