Need Information On FHA Loans?

The following information comes directly from the FHA website.

Can I really buy a house?

For millions of people every year, the answer is “yes”, and an FHA mortgage might be the way you can. Every year FHA helps thousands of first-time homebuyers just like you move into the house of their dreams.

A home is an investment, it can save you money and it’s a place to live and raise children. It’s a plan for the future and an investment in your community. That’s why we at FHA want all Americans to have an opportunity to enjoy the benefits of owning a home.
Knowledge opens doors. This is literally true when it comes to buying a home. To become a first-time homebuyer, you need to know where and how to begin the home buying process. The following questions and answers will give you basic knowledge. and the tools necessary to navigate the entire process – from deciding whether you’re ready to buy, all the way to that final proud step, getting the keys to your new home!

Are you ready to buy a home?

You can find out by asking yourself some questions:
• Do I have a steady source of verifiable income? Have I been employed on a regular basis for the last 2-3 years? Is my current income reliable?
• Do I have a good record of paying my bills?
• Do I have few outstanding long-term debts, like car payments?
• Do I have money for a down payment?
• Do I have the ability to pay a mortgage every month, plus additional costs?

If you can answer “yes” to these questions, you are probably ready to buy your own home.

Isn’t buying a home really hard? Don’t you need a lot of money down and perfect credit?

It’s not nearly as hard as you might think. Our 100 Questions and Answers covers most of the situations that you might think of. FHA understands that many first-time homebuyers may have had some financial problems in the past and don’t have a lot of money saved. That doesn’t mean you can’t buy a home. Because FHA insures your mortgage, lenders are more willing to give loans with lower qualifying requirements, making it easier for you to qualify (or get approval). Even if you have had credit problems such as bankruptcy, it is easier for you to qualify for an FHA loan than a conventional loan. FHA has a low 3% down payment requirement, and that money can come from a family member, employer or charitable organization. Many other conventional loans don’t allow this.

How can I find out what my credit rating is?

There are several ways to do this. You can purchase a credit report from one of the three national credit reporting agencies: Equifax, Experian and TransUnion. They also offer extra services for a price, where you can get regular reports on your credit.
Better yet, you may be entitled to a free credit report every twelve months from each of these three agencies. To request your credit reports, visit www.annualcreditreport.com. At this site, you can learn how to get your free credit reports. You might also want to visit the Federal Trade Commission’s web site for consumers at www.ftc.gov/bcp/consumer.shtm for information about free credit reports and for some good advice about your credit.

Purchase/rehabilitation loans

Sometimes you might see a home you’d like to buy, but it needs a lot of work. FHA has a loan for rehabilitating and repairing single-family properties called the SF Rehabilitation Loan program (203k). You can get just one mortgage loan which includes the mortgage and the cost of repairs combined. The mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. The advantage of this loan is that you can buy a home that needs a lot of work, but you still have only one mortgage payment, and you can complete the repairs after buying the home.

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