If you want to buy your first home, you should look into the loans that the Federal Housing Administration offers (FHA). These loans can help you reach your dream of owning your own home by giving you a lot of good things. The FHA made these loans with first-time homebuyers in mind. Not only are they competitive in the mortgage market, but they are also easier to get if you are having trouble getting a loan from a regular mortgage lender on terms you can live with.
The FHA has different kinds of loans, such as fixed-rate loans and loans with rates that change over time. One benefit of an FHA adjustable rate mortgage is that they guarantee the interest rate on your loan won't change by more than one or two percentage points. This means there won't be any big jumps or sudden changes that could throw you off financially.
They also have something called a purchase/rehabilitation loan, which lets you buy a home that needs a lot of work. The loan pays for both the price of buying the house and the cost of fixing it up. You won't have to take out a mortgage loan and then worry about how you'll pay for repairs to make the house your dream home. In fact, many people who buy homes find that if they do a lot of the work themselves, they can easily afford a bigger home than if they bought one that was already done.
FHA loans are also great because they usually don't require as much of a down payment as a regular mortgage loan would. They also give loans to people who might not be able to get a conventional mortgage because of their credit. Also, the interest rate on an FHA loan is usually lower than the interest rate on a conventional loan for people with less than perfect credit.
It's important to know that the FHA doesn't give you the money for the house and doesn't decide how much the loan will cost. The loan you get from a traditional lender is actually insured by the FHA.
They promise that if you don't pay back the loan, they will. Since FHA-approved lenders know they will get their money back no matter what happens in the future, they usually offer loans with better interest rates and less of a down payment. Of course, you should still shop around and compare mortgages from different FHA-approved lenders to get the best rates.
Most people can easily understand how the FHA works by thinking back to their college days. The federal government promised that if you took out a student loan while in college, they would step in and pay it back if you couldn't. So, the interest rates were usually low and the same for everyone, and anyone could get a loan, no matter what their credit history was like. The same is true for loans backed by the FHA, except that the interest rate is not guaranteed. It is still up to you to make sure you are getting the best deal possible.
If you are a first-time homebuyer with limited funds or if you have had credit problems in the past, you may find that an FHA loan gives you the freedom and flexibility you need to get into a house and start making it a home for your family.
