FHA Home Loan
FHA Loans help borrowers looking for a mortgage option with lower down payment requirements and credit flexibility.
Less Money Down and Flexible Credit Requirements
The Federal Housing Administration (FHA) backs mortgage loans called FHA Loans. This type of home loan helps borrowers who may be struggling to save a large down payment or build up their credit to purchase a home. FHA Loans offer flexible down payment requirements (often as low as 3.5%) and lower credit score requirements (usually as low as 580).
What is an FHA Loan?
FHA Loans are a mortgage option for borrowers who want to buy a house but need more relaxed guidelines. A government agency insures FHA Loans called The Federal Housing Administration, which means the government backs them. This doesn’t mean the government lends you the money for your mortgage. Banks and FHA-approved mortgage lenders, like Allied First Bank, will lend you the mortgage loan.
Because the government backs FHA Loans and requires borrowers to pay FHA Mortgage Insurance, the Federal Housing Administration can offer more relaxed guidelines. The banks and FHA-approved lenders can lend to borrowers that meet FHA requirements because the government guarantees the mortgage will be paid, regardless of whether the borrower defaults on the loan.
How Does an FHA Loan Work?
These mortgages work like other mortgage options available to you! You’ll qualify based on your current credit score, debt-to-income ratio, money you can put in as a down payment, income and employment verification, and several other factors.
However, it is essential to remember that the Federal Housing Administration does have specific requirements–alongside things like credit and down payment–that you’ll need to qualify:
• An FHA Appraisal
• FHA Mortgage Insurance
Calculate your monthly payment for fixed rate or adjustable rate loans.
Allied First Bank
3201 Orchard Rd.
Oswego, IL 60543