Contact George Burkley and American Mortgage and Financial Services for a Home Loan
Goshen, United States - November 27, 2023 / American Mortgage and Financial Services: Mortgage Broker /
Buying your home is a milestone in many people’s lives, fulfilling a part of their dream. However, for some people, it’s difficult to make the purchase on their own. FHA loans are designed to provide confidence to lenders so they can make it easier to qualify for a mortgage loan. Backed by the government, FHA loans allow many people to buy their first home.
If you’re interested in buying a home but are struggling to meet the requirements, make an appointment with George Burkley at American Mortgage and Financial Services. You can discuss your options for an FHA loan in Goshen, IN.
What Is an FHA Loan?
Mortgages have several common requirements, including a large down payment and a healthy financial history. Meeting those requirements means lenders are more likely to trust you with their money. However, for various reasons, it’s increasingly difficult for first-time home buyers to measure up. The down payment is often cited as a major barrier, for example.
The Federal Housing Administration offers a type of mortgage insurance to lenders on behalf of qualifying borrowers. It’s most often aimed at first-time homebuyers, though other low-income borrowers may also benefit. The additional government-backed insurance makes the loan less risky even when borrowers don’t meet standard requirements.
As a result, those borrowers are able to get a mortgage even with a smaller down payment or lower credit score.
How Do FHA Loans Work?
Mortgage lenders usually have strict requirements. The median down payment is around 6% of the loan’s amount. In other words, you can borrow up to 94% of the home’s value. With an FHA loan, you can borrow a larger percentage of the home’s value. With a decent credit score, you only need a down payment of about 3.5%.
Additionally, they also usually ask for a credit score over 620. With an FHA loan, you may be able to get a loan with a credit score as low as 500. However, the better the score, the lower the down payment requirements.
Lenders may also require you to pay for additional loan insurance. This can add to the cost over the life of the loan.
FHA Loan Benefits
The primary benefit of FHA loans is that they are easier to qualify for, even if your finances aren’t in a stellar state. Because they’re backed by a federal agency, FHA loans are less risky for lenders. As a result, borrowers can have:
- A lower down payment, depending on credit score
- A lower credit score
- A bankruptcy or other negative financial event in your past
- A larger amount of debt
Additionally, you may be able to pay closing costs as part of the loan.
FHA Loan Disadvantages
While FHA loans offer a path to homeownership for many people, there are some downsides.
- Mortgage insurance - You’ll have to pay an additional fee for at least part of the loan term.
- Loan max - There’s a limit on what you can borrow.
- Residency - FHA loans can only be used when buying a primary residence that you will occupy within a year.
Contact American Mortgage and Financial Services for an FHA Loan in Goshen, IN
An FHA loan may be the right choice for you, particularly if you’re rebuilding your financial health. However, there may be other options which are a better fit. Make an appointment with a mortgage broker in Goshen, IN, American Mortgage and Financial Services, to discuss your loan options today.
Contact Information:
American Mortgage and Financial Services: Mortgage Broker
216 N Main St
Goshen, IN 46526
United States
Contact American Mortgage and Financial Services
(574) 534-9666
https://americanmortgage.biz/
