If you would want to obtain a home you can call your own, you can do so through a FHA loan. FHA loan is among the many types of mortgage loans. It is a good option, but what are some of the important things that you should know about it? Read on.
FHA Loan Benefits
There are two main benefits when it comes to a FHA loan and these are as follows:
- Lower down payment – among the most common problems when obtaining a home through a mortgage is the down payment. Many people just don’t have enough money to pay the amount required as a down payment. The good thing is, this will not be an issue if you will go for a FHA loan. This loan requires a down payment of 3.5% only and this is relatively lower compared to the down payment required by a conventional loan which can go as high as 15-20%.
- Lower credit score – when you are to apply for another loan, you will only qualify when you have a high credit score. Credit score is an important factor and it is being checked by all mortgage companies. However, with a FHA loan, you can qualify even if you have lower credit score.
Qualifications
So, how can you qualify for this type of loan? Applying and qualifying for this is pretty simple. You simply need to have a steady source of income for a minimum of 3 years. It should also be your first time to acquire a home and lastly, you should be able to pay the down paymentrequired.
Documents Needed
For your application to be approved, there are necessary documents that you should present first. These are the following:
- Past and present address
- Work addresses including the name of companies
- W-2 Tax form
- IRS Tax returns
- A copy of your gross income on a monthly basis
Things to Do Once Qualified
Once you have been approved of your FHA loan application, you can then enjoy the following:
- Lower monthly payments, hence the chance to save money
- The chance to repair or remodel your house
- The chance to get your dream home
Knowing the basics of FHA loan is very important before deciding to apply for it. Of course, it is also wise to consult a professional when you have a question in mind.Click here to find out MORE!
