Factors to Consider Before Taking FHA Mortgage Loan in Fort Worth, Texas
Even though FHA mortgage loan is popular among money prospective home buyers. The loan program is not always the ideal loan program for all mortgage loan applicants. Mistakes made when applying for this loan program can cost the borrower dearly. Below are some of the factors you need to consider before you apply for an FHA mortgage loan.
When is an FHA loan is not a good deal?
FHA loan has numerous benefits like less strict lending standards, small down payment required. The downside is if the borrower has a high credit score or made a large down payment. The borrower will have to pay high interest and fees as compared to conventional loans. In edition, if the borrowers made a down payment of 10 %, they will still dig deep in their pockets to meet mortgage insurance with FHA loan than conventional loan even if they have a credit score of over 680. Nevertheless, the FHA loan program may be the option to buy a home if you have credit issues, recovering from bankruptcy since it lacks a minimum credit score for borrowers. You can use FHA affordable calculator to establish if you are eligible to FHA mortgage loan before you apply for it.
Before you engage your lender to process for an FHA mortgage loan. Make sure that your lender is an FHA approved lender. FHA is the body that is allowed to approve the lenders that offer an FHA loan program. therefore, ensure you confirm with your lender if they are satisfied by FHA to offer FHA loan services.
Purchases that FHA loan covers.
FHA only loan borrowers that intend to buy homes purely for residence. Property is covered by FHA loan up to four-plex with full knowledge that lives in it. The borrower is not allowed to buy a rental property through an FHA loan. In the edition, they cannot purchase vacation property or cottage using FHA loan, and cheating on the type of property can attract penalties if discovered.
In edition, FHA home loans have restriction on the livability of the property. The borrower cannot purchase a condemned property and hope to use FHA mortgage loan to rectify it. The HUD demand that home must be habitable, thus you can only purchase a home that needs just some renovation but not lacking some utility connection, or part of the roofing is missing. FHA does not finance a property that disregards safety standards, soundness, and security. If the property you intend to buy in the close hazardous waste site or contaminated soil FHA will not allow the lender to offer the borrower FHA home loan. Alternatively, if you home require serious renovation FHA 203 K, Rehab Mortgage loan can be the best option. It enables the borrower to buy a house that need serious repairs. However, the loan comes with some challenges. For instance, it will force the borrower to engage general contractor instead of carrying out repairs himself, the price of repair must conform to a mount of 203 K loan, work must be executed within six months.
In conclusion, the above are some of the factors you need to put in consideration before using FHA home loan to secure your dream home.
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