When someone has less than a 20% downpayment available, a Federal Housing Administration (FHA) insured mortgage is often an excellent choice. For many years, conventional financing options were so abundant that few people considered FHA Mortgages. In today’s market, when I help clients review financing options, FHA often ends up as the best choice.
These are some reasons FHA financing may be a good choice for you:
- The down payment requirement is very low and there is often a source available for down payment assistance if it’s needed.
- The seller may be willing to pay your closing costs.
- The FHA mortgage limit for a single-family home in the twin cities area has been temporarily increased from $276,683.00 to $362,790.00.
- FHA financing is very helpful for first time homebuyers, but being a first time homebuyer is not a requirement.
- The paperwork and approval process is very similar to conventional financing, but there are a few extra FHA forms to sign.
- At Summit Mortgage, the approval and closing processes take the same amount of time as conventional financing so there are no delays.
- FHA interest rates are often the same as conventional financing and sometimes lower.
- FHA requires the home to be structurally sound and safe, but the previous strict housing standards have been eliminated.
- FHA financing is more tolerant of credit problems than conventional financing.
There are many things to consider when choosing the best financing program for your particular circumstances. When you are ready to purchase a home, don’t be surprised if FHA is the best option for you.
