First-time home buyers should know about several things going into the home loan process, including their options when it’s time to refinance or consider a new home loan. Are you fully informed about your home loan options with an FHA mortgage?
FHA Home Loans For First-Time Buyers Allow Non-Occupying Co-Borrowers
A non-occupying co-borrower is someone obligated on the mortgage but who does not intend to live in the property full time. A co-borrower can help you to qualify for the mortgage by paying part of the closing costs and the down payment, but all borrowers applying for the mortgage loan must financially qualify.
That means that the credit liabilities of the borrower with the weakest credit cannot be offset by the strengths of the co-borrower. Everyone will be considered on the mortgage loan for their creditworthiness.
FHA Home Loans For First-Time Borrowers Mean Lower Down Payments In More Ways Than One
If you can find a down payment assistance program in your area, or you can get down payment gift funds from a family member or friend, you can offset the down payment expenses on the already-low 3.5% down requirement on FHA mortgages.
FHA Home Loans Are Good For Condo Units, Mobile Homes, And Much More
Some are surprised to learn that FHA home loans are available for condos, town homes, or multi-unit homes. That’s because some still assume (wrongly) that FHA mortgages are need-based loans with an income cap or other restrictions.
That may be true of other government backed loans (the USDA mortgage loan program offers need-based mortgage loans) but it is NOT true of FHA home loans.
You Can Refinance FHA-To-FHA To Get A Lower Interest Rate Or Mortgage Payment
FHA loans can be refinanced using a Streamline Refinance loan which must give some benefit to the borrower in most cases such as a lower payment or interest rate.
FHA Streamline refinance options are not available for non-FHA mortgages so this is an advantage for any borrower who wants to refinance with an existing FHA home loan whether that’s a condo loan, One-Time Close construction mortgage, mobile home loan, etc.
Ask your loan officer about these issues if you aren’t sure how they might affect your transaction. You’ll be glad you did.