FHA Loans Make Home Ownership a Reality
The idea of purchasing a home can be very exciting, yet there are some challenging obstacles that can come along with the process. Many people worry about saving enough money for a down payment, or the rigorous credit and eligibility requirements that are involved with purchasing a home. FHA loans are a great mortgage option for home buyers because they offer a low down payment and have relaxed qualifying requirements that make obtaining your dream home a reality. If you are searching for a home in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, Foundation Mortgage offers great deals on FHA loans, and can help guide you through the process of finding and financing your perfect home.
What Is an FHA Loan?
An FHA loan is classified as a non-conventional loan, so it is insured by a division of the federal government called the Federal Housing Administration. Since it is backed by the government, private lenders are protected from borrower default, so they are able to offer excellent deals, such as an inexpensive down payment and a relaxed qualifying credit score. FHA loans were created after the Great Depression to help families with unsteady finances afford a home with low financing in order to re-stimulate the economy after the economic decline. Although some of the requirements have changed, this remains a popular program that helps people with less than ideal credit obtain a home.
What Are the Benefits of FHA Loans?
FHA loans offer many excellent benefits, especially for first time home buyers. First of all, you can secure a down payment for as low as 3.5%. To secure an FHA loan, a lenient credit score is allowed, so if your credit score is less than ideal, you can still obtain a mortgage. Another great benefit is that if you are unable to come up with enough money for the down payment requirement, the amount can be given to you as a gift by family members or friends. Refinancing options on existing homes are also available with FHA loans.
Qualifications for an FHA Loan
When applying for an FHA loan, some basic requirements must be met. The common criteria for an FHA loan include:
- If you have a credit score of 580 or higher, you can secure a down payment of 3.5%. You also could be considered with a score of 500-579, however you will need to pay a higher down payment
- Your FHA-secured home must be your primary residence
- You must have a debt-to-income (DTI) ratio of 43% or less
- Your home must meet certain safety and security requirements
Explore Your Home Owning Options Today
Whether you are a first time home buyer or a current homeowner looking to refinance an FHA loan in the Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee areas, contact Foundation Mortgage today for a consultation. We will help assess your financial situation and help determine your eligibility for an FHA loan so that you can be on the pathway to obtaining your ideal new home.