You have to know what you’re getting yourself into, especially if it’s a loan. Borrowers need to at least get a credit score of 580 or higher to get their mortgage down payment as low as 3.5%. Meanwhile, borrowers who have scores between 500 and 579 must at least make down payments of 10% to apply for a loan.
This is very attractive to most home buyers, since most lenders would require them to pay at least 20% down payment to get their loans. Home buyers can use their own savings as a down payment. They may also ask help from a family member for assistance or check their local government or state for any down payment assistance program.
Certain counties in each state, like Texas, have their own limits. Anderson County has a maximum lending limit of $271,050 for a single detached house, $347,000 for Duplex, $419,425 for Triplex, and $521,250 for Fourplex. The exact lending limits for FHA loans can be found on FHA’s official website.
Although ‘FHA loans’ guarantee a much cheaper down payment, FHA is not a mortgage lender. FHA offers mortgage insurance to financial establishments like, credit unions, banks, and other lenders. It guarantees the lenders that they will get a portion of any incurred losses if in case the FHA- insured loan default or went to foreclosure. Home buyers need to get their loan from an FHA- approved lender to apply for it. But since each lender offers different interest rate ad costs, it would be advisable to shop around for other lenders that offer cheaper rates.
The two mortgage insurance premium that has to be paid are upfront premium and the annual premium. Upfront premium is paid as soon as the borrower gets the loan and can financed as part of the total loan amount. The annual premium can be paid on a monthly basis. The amount of annual premium to be paid differs and depends on how long the loan will be. A 15- year loan, or a down payment of less than 10% has 0.7% worth of annual premium to be paid monthly.
One good thing about FHA loans is that it can also be used to make repairs to their houses. An updated 203k allows borrowers for up to $35,000 to be used for non- structural repairs. This may include replacing cabinets or fixtures, painting, and even fixing the windows.
Applying for FHA loans is not as complicated as some people think. You just have to coordinate with any of the FHA- approved lenders to know more about the requirements. It is always best to ask any real estate broker cities like Texas to know more about the other options for getting a much smaller down payment for your house.<< Back to the list.
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Primary Residential Mortgage, Inc.
Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice.