Reason Why Most Home Buyers Prefer FHA Mortgage Loan in Flower Mound, Texas
Despite the existence of numerous mortgage loan in Flower Mound like a conventional loan, VA loan, Jumbo loan, etc. FHA loan still dominates the market of mortgage loan with most homebuyers preferring to use FHA mortgage loan to purchase a home. Numerous lenders, people may wonder why most prospective home buyers prefer FHA mortgage loan. Below are some reasons why most homebuyers prefer to FHA mortgage loan in Flower Mound to secure a home or house.
A credit score of prospective borrowers is of great importance when it comes to the application of mortgage loans. Borrowers with low credit score mostly face rejection in some mortgage loans such as a conventional loan. When it comes to FHA mortgage loan borrowers with credit score issues can still get approved for FHA mortgage loan provided, they can explain their credit score problem and proved that the problem had been rectified. However, borrowers with great credit score stand a better chance to get his or her FHA loan get approved more easily. In edition, FHA forecloses shrink while conventional loan forecloses skyrocket yet they still strict with a credit score. The FHA underwriters scrutinize the entire credit record of the prospective borrower to certain if the borrower is culpable of resettling the loan. If new credit issues have been resolved, the past credit issues can be overlooked by the lender.
It requires little money.
When it comes to FHA loan, the seller can meet the sales price up to 6 % towards the closing cost. Furthermore, down payment assistance program has been suspended by Congress. However there is a plan in the legislature to restore it. In FHA loan borrower can receive a gift from family member to cater for a down payment.
Property record or history.
FHA overlooked rental or other housing records if they are not available. This advantages us to borrowers that may lack housing record, thus deter them from securing the loan.
FHA allows non – occupying co-borrower.
FHA allows the use of income or asset of non-occupants for qualification purpose. In nut shell non occupying relative is allowed to co-sign the mortgage. This program is primarily allowed to enable parents to help their children to secure a home.
FHA does not require reserves.
FHA does not demand the borrower to have cash reserve compared to a conventional loan that required the borrower to have a cash reserve on 2 to 1-unit properties. The grading of borrower profile is based on FHA score card that considers job tuner, assets, and credit score. Possessing reserves stabilize credit profile.
In conclusion, FHA loan is not just popular among many home buyers in Flower Mound. it popularity is caused by low credit score, sellers meet closing cost, property record is not a must if not available, non-occupying relatives can cosign the mortgage, and it does not require reserve.
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