Many people think FHA stands for First-time Homebuyers Association. It doesn’t. FHA stands for Federal Housing Administration. Why is this important? Because FHA does not require you to be a first time home buyer to use their services. FHA will also refinance your current mortgage and they offer cash-out financing on your current home.
Some advantages of choosing an FHA loan are as follows:
- Lower interest rate. FHA offers fantastic interest rates.
- They will not only accept fair to bad credit (580 credit score and above), but they also will give you a tremendous rate with a low credit score. Conventional loans will charge you massive fees for a low credit score. FHA will charge you a very similar rate as they would someone with a good to excellent credit score. There is a difference, but the difference is massive with conventional vs subtle with FHA.
- They only require you to put 3.5% of your purchase price for a down payment.
- They finance all types of properties, even duplex’s and 4 plex’s. As long as you live in one of the units, they will finance it. They will also help you rebuild damaged homes and let you finance it.
- They will allow your family to “gift” your down payment, meaning they can basically pay for your home for you.