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What Is an FHA Loan and Who Qualifies For One?

What Is an FHA Loan and Who Qualifies For One?

The mortgage loan program through the FHA are an important money-saving asset to new homeowners.

FHA Mortgage Qualification

An FHA loan—one of the government’s mortgage loan programs—can be the answer to financial prayers. If you qualify, you’ll enjoy relaxed lending standards and lower down payments, as these are just a couple of the most prominent characteristics of this money lending alternative.

Many mortgage borrowers today don’t have the financial chops to qualify for traditional loans. This stems from younger applicants entering the housing market as well as applicants with less than stellar credit. These factors don’t have to be the barrier between you and your dream home any longer.

An FHA loan is a mortgage that is secured and insured through the Federal Housing Administration. Because the banks providing these loans have the guarantee of insurance through the federal government, they can be more relaxed about interest rates and flexible when it comes to applicant credit qualifications.

Wondering whether you qualify? Here are a few of the most important questions to ask yourself:

  1. Can you afford 3.5% of the purchase price for a down payment? This is the typical rate many FHA loans require. A more typical down payment amount would be 10% of the purchase price, so this is a huge reduction.

  2. Is your credit score 580 or higher? This range of credit score will qualify you for the best FHA loans available.

  3. Have you attempted to improve your credit score or spoken with a financial advisor? This can be key when preparing for your best housing loan.

If you are ready to move forward in the qualification process for an FHA loan or any other type of loan, the team at Midland Mortgage Corp. is here to help you. Get pre-qualified for mortgage loan programs today – or call us at 800-854-9454 with your questions.

Posted Jan 15, 2015 by Midland Mortgage Corporation