Buying a home can be daunting, but it doesn’t have to be. One of the most accessible and affordable mortgage options available is an FHA mortgage. An FHA mortgage is a loan that is insured by the Federal Housing Administration, making it easier for people with lower credit scores and incomes to qualify for a loan than they would with other types of mortgages. Here’s what you should know.
To qualify for an FHA loan, you must meet certain criteria. This means you’ll need:
These qualifications make FHA loans accessible for many people who may not otherwise be able to secure financing for their dream home purchase.
One of the biggest benefits of an FHA loan is that you only need a 3.5% down payment to qualify—making it much easier than some other traditional mortgages that require 20% or more upfront. This low down payment requirement makes it easier for those with limited savings to get into homeownership without having to wait until they have saved up enough money to cover the higher down payment requirements associated with other types of loans.
The closing costs associated with an FHA loan are typically much lower than those associated with other types of mortgages, so this can also help make homeownership more attainable for those on a budget who may not have thousands of dollars set aside for closing costs alone. Additionally, because the federal government insures these loans, lenders are often willing to offer borrowers lower interest rates—making your monthly payments more affordable over the life of your loan.