The process of qualifying for a loan is often difficult, which is why there are so many resources available to provide assistance and relief. FHA is just one of several governmental organizations that were created to help facilitate the process of buying a home.
Applying for your first mortgage is daunting without the proper preparation. FHA seeks to ease the process for new homeowners with their first time buyer incentive program. This program is designed to help young homeowners make the leap into their first mortgage without financially derailing themselves.
Easier To Qualify
Because the FHA insures all their loans, banks are often willing to approve larger mortgages because they know a third party will step up if you can’t pay. That means people with bad credit history who might otherwise have trouble qualifying for a loan have better chances with FHA backing. There is no income limit attached to FHA loans, although you do need to have a reasonable debt to income ratio. FHA loans can also decrease your down payment, so you can buy a home with less initial capital.
Too Good To Be True?
All of this sounds great, right? You might be wondering how it all works. It isn’t really that complicated. The government assumes the financial risk of borrowers defaulting by backing loans to mitigate that risk. To offset the cost of this backing, they charge a modest initial fee and on subsequent loan payments.
FHA incentives can make the impossible possible for some. What can they do for you? For more information about FHA loans, contact us.