Thinking of buying a home with a mortgage loan? FHA mortgages have options you should think seriously about-and not just for the purposes of buying the home and moving in.
What Options Do I Have To Make A Lower Down Payment On My FHA Loan?
This question is best answered depending on why it’s asked; are you in need of lower out-of-pocket expenses for your mortgage or do you need to know what FICO scores will let you qualify for a lower down payment?
Down payment assistance programs may be available from third-party agencies in your housing market. As long as these down payment programs meet FHA standards and state law, an FHA borrower may apply for them. The FHA itself does not offer down payment assistance.
Borrowers may also receive down payment gifts from friends, family, and co-workers. These gifts must also meet FHA loan rules and lender requirements.
FHA downpayment requirements are higher when the borrower’s FICO scores do not meet the FHA minimum guidelines for the lowest down payment of 3.5%. FHA standards say that FICO scores between 500 and 579 require a 10% down payment. Remember that your lender may have additional FICO score standards which must be met, so ask before you commit.
What Options Do I Have When Buying A Home With An FHA Mortgage?
FHA home loans have options that include the ability to purchase a home with up to four living units, the ability to buy a fixer-upper with an FHA Rehabilitation Mortgage, and the option purchase choices from a diverse range of home types including condo units, duplexes, and mobile homes.
What Should I Know About Past Credit Mistakes And My FHA Loan Application?
FHA loans can be more forgiving than conventional ones. But if your past credit issues include late or missed payments, be sure you have a full 12 months between any missed or late payment and your FHA mortgage loan application.
This will greatly improve your chances at loan approval. Lender standards may factor in for this issue as well, be sure to ask your lender what additional requirements may apply. FHA minimum waiting times after bankruptcy, foreclosure, or other negative credit events may not be the only ones that affect your ability to borrow and when.
Remember that every participating FHA mortgage lender is different; compare lenders and options to make sure you find the most competitive terms and conditions open to you.