The FHA Home Loan Program was designed for first time home buyers, anyone can apply for the program. Not only can an FHA home loan be used to finance the purchase of a new primary residence, it can also be used to refinance your current home loan.
The FHA home loan program offers many benefits.
1. Low down payment requirement
The initial payment requirement is currently as low as 3.5% of the purchase price. Funds for the down payment can come from many different sources, such as a gift from a family member or a withdrawal from your 401K. Because you can get your down payment funds from many different sources, it will be much easier for you to buy your home. To know more about purchase loan programs, browse online.
2. The seller can help you pay your closing costs
This will allow you to buy a new home with no funds if you can get a gift from a family member for the down payment and ask the seller to pay up to 3% of the closing costs. Closing costs that the seller may pay also include "prepayments" such as property taxes, home insurance, and interest.
3. Interest rates are low
FHA mortgage rates are very competitive, if not lower, than most home loan rates. Although in today's mortgage market you will need around 620 credit scores to get an FHA home loan, the FHA interest rate is not tied to your credit scores.
4. No limits on the amount of the mortgage
There are no limits on the amount of FHA home loans, but there are limits on the property values you can buy with an FHA loan. Limits on property values are different across the country and you should check with a real estate agent or lender in your area.